87
http://www.scientificpapers.org
How to use Fibonacci retracement to predict forex market
Violeta Gaucan, Titu Maiorescu University, Bucharest, Romania
Abstract: In the material below I have tried to explain how can be used Fibonacci
Retracement as an important tool to predict forex market. In this article I have
included some graphic formats such as Fibonacci arcs, fan, channel, expansion, wich
are created also with Fibonacci retracement and also rules to perfect chart plotting. I
have analyzed some examples of Fibonacci retracements pattern in a downtrend and
in an uptrend. In this article I have used and combine material from different sources
trying to create a start point for those one of you that are interested.
Keywords: Fibonacci ratios, downtrend, uptrend, suport and resistance levels
―Fib numbers‖ (as they are often referred to) also appear in many aspects of nature
such as the arrangement of leaves on a stem and the branching of trees. Some day
traders, swing traders and investors therefore say that the nature of the financial
markets also manifest themselves in the structure of Fibonacci numbers.
Now the big question: Do Fibonacci numbers have a dramatic influence on the
financial markets? Should you use Fibonacci trading in your trading system to help
with your stock market analysis? Therefore Fib numbers are indeed significant in
trading if for no other reason than they become a self-fulfilling prophecy through their
use by a massive number of Fibonacci Forex, stock and futures traders. And those
numbers can be used to calculate Fibonacci retracement levels. How? we will find
together in the material below.
History and mathematics Fibonacci(1175-1240) was one of the greatest mathematicians of the Middle Ages.
He was born in Italy in Pisa town. In 1202 after a trip to Egypt, he come back in Italy
where it publishes a treatise on arithmetic and algebra named “Incipit Liber Abacci”(
compositus a Leonardo filius Bonacci Pisano). In this treaty introduces for the first
time Arabic numeral system in Europe, and the numbers we use today: 0,1, 2, 3,…,9.
Leonardo da Pisa, is rightly considered the first great original mathematician of
Europe.
In his many trips (Egypt, Syria, Greece, Sicily) he takes contact with Greek and
Arabic culture. The story of numbers appears in Italy in 1202, with the advent of the
book Liber Abaci, written by Leonardo Pisano, by then 27 years old. The book has 15
sheets heads, and are written entirely by hand, the pattern appeared 300 years later.
Fibonacci book begins with notions about the identification numbers of the units digit
of tens, hundreds, of thousands, etc. In the last chapters we find calculations with
integer numbers and fractions, proportions rules, extraction of square roots and higher
order, then presents the solutions of linear and quadratic equations. Liber Abaci was
filled with practical examples: calculation of financial accounting, corporate income,
money exchange, conversion of weights, and the calculation of loan with interest.
In terms of mathematic, Fibonacci numbers ƒn are given by the following recurrence:
ƒ0 = 0, ƒ1 = 1, ƒn+1 = ƒn-1 + ƒn , n≥1.
Theorem 1. If χ2 = χ + 1, then we have: χ
n = ƒnχ + ƒn-1 , n ≥2.
Argument: We will prove by induction after n.
For n 2 the relationship is trivial. We suppose that n 2 we have χn-1
= ƒn-1χ +
ƒn-2. Then χn = χ
n-1 · χ = ƒn-1(χ + 1) + ƒn-2χ = (ƒn-1 + ƒn-2)χ + ƒn-1 = ƒnχ + ƒn-1.
Theorema 2. (Binet formula). The n-th term of the Fibonacci sequence is given by:
ƒn =
nn
2
51
2
51
5
1, n≥0.
Argument: Equation roots χ2 x 1 are φ =
2
51 and 1 - φ =
2
51
From theorem 1., we have: φn
= φƒn + ƒn-1 and (1 - φn) = (1 – φ)ƒn + ƒn-1
Forward φn – (1 – φ)
n = √5ƒn , from where result the Binet formula.
Fibonacci sequence in forex market
Fibonacci retracement is a very popular tool used by many technical traders to help
identify strategic places for transactions to be placed, target prices or stop losses. The
notion of retracement is used in many indicators such as Tirone levels, Gartley
patterns, Elliott Wave theory and more. After a significant price movement up or
down, the new support and resistance levels are often at or near these lines.
The Fibonacci sequence is simply beginning with the numbers 0 and 1, and then each
number after that is the sum of the previous two.
So …
0 + 1 = 1
Then you take the sum of the last 2 numbers of the above equation and add them:
1 + 1 = 2
Then you take the sum of the last 2 numbers of the above equation and add them:
1 + 2 = 3
Then you take the sum of the last 2 numbers of the above equation and add them:
2 + 3 = 5
Then you take the sum of the last 2 numbers of the above equation and add them:
3 + 5 = 8
Then you take the sum of the last 2 numbers of the above equation and add them:
5 + 8 = 13
Then you take the sum of the last 2 numbers of the above equation and add them:
8 + 13 = 21
… and on it goes to infiinity!
The Fibonacci sequence of numbers is as follows: 0, 1, 1, 2, 3, 5, 8, 13, 21, 34, 55, 89,
144, etc. Each term in this sequence is simply the sum of the two preceding terms and
sequence continues infinitely. One of the remarkable characteristics of this numerical
sequence is that each number is approximately 1.618 times greater than the preceding
number. This common relationship between every number in the series is the
foundation of the common ratios used in retracement studies.
Fibonacci ratios
Fibonacci ratios are mathematical relationships, expressed as ratios, derived from the
Fibonacci sequences.
The key Fibonacci ratios are 0%, 23.6%, 38.2%, 50%, 61.8% and 100%.
F100% = 12
510
The key Fibonacci ratio of 0.618% - also referred to as "the golden ratio" or "the
golden mean" - is found by dividing any number in the sequence by the number that
immediately follows it. For example: 8/13 is approximately 0.6154, and 55/89 is
approximately 0.6180.
F61,8% = 6180,02
511
The 0.382 ratio is found by dividing any number in the sequence by the number that is
found two places to the right. For example: 34/89 is approximately 0.3820.
F38,2% = 381966,02
512
The 0.236 ratio is found by dividing any number in the sequence by the number that is
three places to the right. For example: 55/233 is approximately 0.2361.
F23,6% = 236068,02
513
The 0 ratio is :
F0% = 02
51
The 0.500 ratio is derived from dividing the number 1 (third number in the sequence)
by the number 2 (forth number in the sequence).
F50% = 500000,02
1
The 50% retracement level is not really a Fibonacci ratio, but it is used because of the
overwhelming tendency for an asset to continue in a certain direction once it
completes a 50% retracement.
Fibonacci retracement is created by taking two extreme points on a chart and dividing
the vertical distance by the key Fibonacci ratios. 0.0% is considered to be the start of
the retracement, while 100.0% is a complete reversal to the original part of the move.
Once these levels are identified, horizontal lines are drawn and used to identify
possible support and resistance.
Other ratios
The 0.764 ratio is the result of subtracting 0.236 from the number 1.
F76,4% = 763932,02
511
3
The 0.786 ratio is:
F78,6% = 786151,02
51 2
1
Fig. 1. Fibonacci ratios. Graphic representation
For reasons that are unclear, these ratios seem to play an important role in the stock
market, just as they do in nature, and can be used to determine critical points that
cause an asset's price to reverse. The direction of the prior trend is likely to continue
once the price of the asset has retraced to one of the ratios listed above.
The following chart illustrates how Fibonacci retracement can be used. Notice how
the price changes direction as it approaches the support/resistance levels.
Fig. 2. Fibonacci retracement to the 23.6% level on the EURUSD
Fibonacci Retracements Pattern Stocks will often pull back or retrace a percentage of the previous move before
reversing. These Fibonacci retracements often occur at three levels – 38.2%, 50%, and
61.8%.
The use of Fibonacci retracement levels in online stock trading, stock market analysis
(as well as futures, Forex, etc.) serves to help determine how far one expects a market
to retrace before continuing in the direction of the trend.
It is often used with other technical analysis indicators such as a moving average,
stochastics, RSI, candlestick patterns, etc. When using Fibonacci Forex, stocks,
futures and commodities can all be traded using the Fibonacci retracement of a trend.
The first thing you should know about the Fibonacci tool is that it works best when
the market is trending.
The idea is to go long (or buy) on a retracement at a Fibonacci support level when the
market is trending up, and to go short (or sell) on a retracement at a Fibonacci
resistance level when the market is trending down. In order to find these retracement
levels, you have to find the recent significant Swing Highs and Swings Lows.
Then, for downtrends, click on the Swing High and drag the cursor to the most recent
Swing Low. For uptrends, do the opposite. Click on the Swing Low and drag the
cursor to the most recent Swing High.
Uptrend
Fig. 3. A daily chart of AUD/USD
Here we plotted the Fibonacci retracement Levels by clicking on the Swing Low at
.6955 on April 20 and dragging the cursor to the Swing High at .8264 on June 3.
Tada! The software magically shows you the retracement levels.
As you can see from the chart, the retracement levels were .7955 (23.6%), .7764
(38.2%), 7609 (50.0%), .7454 (61.8%), and .7263 (76.4%).
Now, the expectation is that if AUD/USD retraces from the recent high, it will find
support at one of those Fibonacci levels because traders will be placing buy orders at
these levels as price pulls back.
In theory Fibonacci retracement in an uptrend can also be represented as in the picture
below:
Fig. 4. Representation of an uptrend in theory
Now, let's look at what happened after the Swing High occurred
Fig. 5. A daily chart of AUD/USD
Price pulled back right through the 23.6% level and continued to shoot down over the
next couple of weeks. It even tested the 38.2% level but was unable to close below it.
Later on, around July 14, the market resumed its upward move and eventually broke
through the swing high. Clearly, buying at the 38.2% Fibonacci level would have
been a profitable long term trade!
Downtrend
Now, let's see how we would use the Fibonacci retracement tool during a downtrend.
Below is a 4-hour chart of EUR/USD.
Fig. 6. A daily chart of EUR/USD
As you can see, we found our Swing High at 1.4195 on January 26 and our Swing
Low at 1.3854 a few days later on February 2. The retracement levels are 1.3933
(23.6%), 1.3983 (38.2%), 1.4023 (50.0%), 1.4064 (61.8%) and 1.4114 (76.4%).
The expectation for a downtrend is that if price retraces from this low, it will
encounter resistance at one of the Fibonacci levels because traders will be ready with
sell orders there.
In theory Fibonacci retracement in an downtrend can also be represented as in the
picture below:
Fig. 7. Representation of an downtrend in theory
Let's take a look at what happened next.
Fig. 8. A daily chart of EUR/USD
The market did try to rally, stalled below the 38.2% level for a bit before testing the
50.0% level. If you had some orders either at the 38.2% or 50.0% levels, you
would've made some mad pips on that trade. In these two examples, we see that price
found some temporary support or resistance at Fibonacci retracement levels.
Fibonacci Arcs
Fibonacci Arcs are built as follows: first, the trend line is drawn between two extreme
points, for example, from the trough to the opposing peak. Then three arcs are built
having their centers in the second extreme point and intersecting the trend line at
Fibonacci levels of 38.2, 50, and 61.8 per cent.
Fig. 9. Fibonacci arcs
Fibonacci arcs are considered to be potential support and resistance levels. Fibonacci
Arcs and Fibonacci Fans are usually plotted together on the chart, and support and
resistance levels are determined by the points of intersection of these lines.
It should be noted that the points of intersection of Arcs and the price curve can
change depending on the chart scale since an arc is a part of a circumference, and its
form is always the same.
Fibonacci Fan
Fibonacci Fan as a line instrument is built as follows: a trend line — for example from
a trough to the opposing peak is drawn between two extreme points. Then, an
"invisible" vertical line is automatically drawn through the second extreme point.
After that, three trend lines intersecting this invisible vertical line at Fibonacci levels
of 38.2, 50, and 61.8 percent are drawn from the first extreme point.
These lines are considered to represent support and resistance levels. For getting a
more precise forecast, it is recommended to use other Fibonacci instruments along
with the Fan.
Fig. 10. Fibonacci Fan
Fibonacci Time Zones Is a sequence of vertical lines having Fibonacci intervals of 1, 2, 3, 5, 8, 13, 21, 34,
etc. Significant price changes are considered to be expected near these lines.
To build this instrument, it is necessary to specify two points to determine the length
of a unit interval. All other lines are built on base of this unit interval according to
Fibonacci Numbers.
Fig. 11. Fibonacci time zones
Fibonacci Expansion
Fibonacci Expansion is largely similar to Fibonacci Retracement and intended for
determining of the end of the third wave. Unlike Fibonacci Retracement, this
instrument is built not on the only one trend line, but on two waves.
First, the line of the first wave is drawn, its height will be considered as a unit interval
later on. The end of the second wave serves as a reference point for building an
invisible vertical line. The corresponding lines are drawn from the reference point on
the interval equal to 61.8, 100%, and 161.8 per cent of the unit interval. The third
wave is considered to finish near these levels.
Fig. 12. Fibonacci expansion
Fibonacci Channel
Fibonacci Channels are built using several parallel trend lines. To build this
instrument, the channel having the width taken as a unit width is used. Then, parallel
lines are drawn at the values equal to the Fibonacci Numbers, beginning with 0.618-
fold size of the channel, then 1.000-fold, 1.618-fold, 2.618-fold, 4.236-fold, etc. As
soon as the fifth wave finishes, correction in the direction opposite to the trend can be
expected.
It is necessary to remember for a correct Fibonacci Channel building: base line limits
the upper part of the channel when trend is ascending, and the lower part of it when
trend is descending.
Fig. 13. Fibonacci channel
Rules to Perfect Fibonacci Chart Plotting
Fibonacci retracements represent an excellent tool for investors, identifying reversal
points on a historical price chart. Anyone can see that on any historical price chart,
trading prices will inherently pull back or retrace a percentage of the previous
movement before reversing again and then proceeding in the direction of the overall
long-term trend.
Historical observations demonstrate that these retracement percentages seem to follow
a Fibonacci ratio pattern. By carefully plotting these retracement possibilities on a
historical price chart, a trader improves his or her probability towards successful
investing. Certain rules are recommended to improve the likelihood of identifying
successful entry and exit points.
Rule 1: Identify the High and Low
In order to use Fibonacci retracements, it is important to identify relative high and low
prices on a historical chart. The longer the term that is utilized, the more likely the
Fibonacci retracement lines plotted will identify significant levels demonstrated
support and resistance.
Rule 2: Plot the Fibonacci Retracement Levels
Once a high and low for a time period has been chosen, it will be possible to draw the
Fibonacci retracement percentage levels onto the chart. The low point would represent
0%, and the high point represents 100%.
Between these two extremes, one can plot the most significant Fibonacci percentage
plot lines of 38.2%, 50%, and 61.8%. It is also beneficial to plot these percentages
below and above the high and low. In other words, plot lines that would be 138.2%,
150%, and 200% on the up side above the high, and -30.2%, -50%, and -61.8% on the
down side below the low. It should be noted that software exists that will allow you to
automatically plot these Fibonacci levels.
Rule 3: Observe Historical Behavior
Once the plot lines have been placed on the chart, it is important to observe at which
Fibonacci levels in the historical period under consideration has demonstrated support
and resistance. These areas will be objectively seen to show that when approached,
retracement clearly resulted.
Rule 4: Forecast Future Movement
The appropriate Fibonacci retracements will vary from investment market to
investment market and be a function also of the trading character at any particular
time. Consequently, successful use of Fibonacci techniques will be highly dependent
on the accurate interpretation of previous price movement activity within the range
identified. When the proper Fibonacci retracements have been observed, entry and
exit points can be forecasted for position-taking based upon the clearly demonstrated
historical record.
Rule 5: Always Have Confirmation
Through study and observation, many successful traders have mastered the techniques
necessary for the use of Fibonacci retracement ratios. As anyone can see, however,
the support and resistance represented by these levels do not automatically appear at
all times. In other words, after the 38.2% retracement, the price may continue in that
direction and not stop or reverse itself until perhaps it reaches 61.8%.
What is clear, however, at a certain Fibonacci point, a retracement will occur. As a
result of this, the use of Fibonacci techniques is most successful when used in
conjunction with other technical analysis tools that confirm what has been identified.
Conclusions
Fibonacci Retracement trading is used in all markets – online stock trading, Fibonacci
Forex trading and also in the futures markets.
Whether or not one believes the Fibonacci trading numbers have any special
significance, the fact that they are so pervasively used creates a self-fulfilling
prophecy to the levels. Thus, for whatever reason you choose to believe, Fibonacci
retracement levels are an important part of technical analysis and should be
incorporated into your trading system.
Using Fibonacci retracements in your trading will not make you a professional swing
trader, day trader or investor overnight. But used in conjunction with other technical
analysis tools such as stochastics, RSI, MACD, moving averages, candlestick
patterns, etc., they can be a very valuable addition to any traders tool box. , Fibonacci
retracement levels are the basis for Fibonacci trading and an important part of
technical analysis and stock market analysis.
References [1] Alexander Elder, Trading for a living, Ed. John Wiley & Sons, Canada 1993
[2] Neculai Stanciu, May 2010, Revista Electronică MateInfo.ro, [online],
http://www.mateinfo.ro/problema_saptamanii%20_concurs_matematica_web/mai201
0/mai2010_stanciu_n/MAI2010_stanciu_n.xht
[3] Mark Whistler, May 12, 2010, How to Profit from Fibonacci Retracements in
Forex Trading, [online], [read in 10 february, 2011],
http://www.tradingmarkets.com/.site/forex/how_to/articles/-75248.cfm
[4] http://www.investopedia.com/terms/f/fibonacciretracement.asp
[5] http://www.fibonacciretracement.net/fibonacci-trading/
[6] http://www.babypips.com/school/support-and-resistance.html
[7] http://en.wikipedia.org/wiki/Fibonacci_number
[8] http://stockcharts.com/school/doku.php?id=chart_school:technical_indicators
[9] http://www.fibonaccigenius.com/index.html
[10] http://ta.mql4.com/linestudies/fibonacci
MONITORING THE MANAGEMENT QUALITY OF THE PUBLIC
ADMINISTRATION AREA BY USING THE COMPUTER APPLICATIONS
VĂTUIU VIRGINIA ELENA1, VĂTUIU TEODORA
2
ABSTRACT: Achieving fundamental management in public organizations involved
in the public office holders and posts of leadership and execution in this area adds
responsibility in managing all types of resources available to the public sector,
namely human resources, information, material and financial. The main aim of the
management process is to focus human efforts to coordinate joint work. An important
role in this process, is upgrading the quality of organizational management and
delivery of public services, improving public services through the implementation of
innovative tools, leading to government-oriented processes and results-oriented
public service.
KEY WORDS: public service quality, modernization of organizational management,
results-oriented public service, computer applications.
1. The modernization of public administration and improvement of service
quality by the implementation of innovative tools
Public sector modernization and improvement of quality of public services is
essential for the public sector reform. Whatever the management model chosen,
quality of public service remains a key issue for the modernization and reform
program of the government. Quality management offers solutions to problems of
inefficiency and low quality of services delivered, but also reduces costs in times of
financial crisis.
An important role in this process is modernizing the organizational management and
the quality of public services delivery or the institution's activities, leading to more
efficient public services by implementing innovative tools, and to a government
driven process and a results-oriented public service such as for example:
• Promote modernization of organizational management in the
administration through innovative measures, through specialization of
civil servants, their motivation and mobilization towards innovation,
etc.
• Use computer applications in monitoring the quality of services from
public administration.
• Minimize losses and maximize the wins (eg more efficient use of staff
time).
• Improving cooperation between institutions and initiatives to create
collaborative networks.
• Background choices / decisions based on evdence.
• Implementing and monitoring the enforcement procedures to govern
the institution's current business.
• Recovery of outstanding quality management results in terms of
organizational culture.
• Reduce the financial government.
1 Masters Student at “Roehampton” University of London, [email protected]
2 Assoc. Prof. at Faculty of Economics, Titu Maiorescu University, Romania,
• Improving services (equipment, materials, personnel, finance).
• Simplification of administrative procedures and measures to reduce
bureaucracy.
• Improve security of public documents.
• Reduce delays in obtaining deliverables and response time to public
service users and focus on service delivery outcomes.
• Promotion of electronic solutions, etc.
2. Public sector efficiency by increasing the integrity, transparency and
accountability in the civil service
Romania, like all other European countries are in the stage of implementation and
strengthening of ethical standards and other legal instruments and administrative
measures to ensure the integrity of government. Successful implementation requires
the introduction of major new changes in the institutions and their organizational
cultures. All stakeholders-governments, private sectors and civil societies are facing
this challenge at all levels. In this context, one needs to promote and encourage best
practices on this topic and to meet this challenge and strengthen the capacity for
cooperation between all parties involved.
An efficient public administration implies the existence of citizen trust. Citizens
expect public servants to serve the public interest fairly and with decency and to
manage public resources every day.
Actions that may lead to the proper application of the concepts of integrity, ethics,
transparency and accountability are:
• Practices and measures to promote ethical conduct in public office.
• Methods of recovery of advisers and their business ethics.
• Measures to prevent and combat corruption.
• Positive and innovative solutions identified and investigated to prevent and combat
corruption.
• Analysis and assessment of situations of risk and vulnerability to corruption and real
achievements as a result of these actions.
• Instrumental integrity standards and indicators.
• Anti-corruption strategies / action plans implemented.
• Measures to avoid infringement regime of incompatibilities and conflicts of interest.
• Establish measures of motivation and retention of qualified personnel in the system.
• Identify the necessary skills and effective use of staff.
• Take steps necessary to achieve a more efficient management of career civil
servants. (Connections with training need mobility etc.).
3. Monitoring and evaluating the implementation of public service quality
management strategy by using informatic aplications
Monitoring will be an ongoing process and is based on the evaluation process
which also provides the necessary adjustment of both the strategy itself and its
implementation and will be undertaken by a working group established by order of
the prefect. It will produce one monitoring report, according to its / their own
operational procedures.
Evaluation will be done by the same working group on monitoring reports and other
tools (such as questionnaires, interviews, internal and external audit reports, etc..).
Following each assessment they will produce a report that will be presented to the
leadership of the institution to identify and implement necessary corrections and
corrective actions. Evaluation will be based on operational indicators set by the
procedure above.
3.1 Proposed Objectives
• Determining the degree of motivation of civil servants.
• Identifying issues in career management functionality of the Gorj County Prefect
Institution.
• Identifying the advantages and disadvantages experienced by civil servants.
• Determining whether the legislation applies to career civil servants.
• Identifying the methodology by which subjects become civil servants and promotion
opportunities.
Guide approach includes:
• Discussion about the status of civil servant
• Story of the last time the subject was assessed
• Promote discussion on the Gorj County Prefect Institution
• Discussion of legislation related to civil servants
• Talk about the subjective perception of their careers
The topics will be raised only if the subject agrees to their exposure or deepening.
Interviews will be conducted at the workplace of each subject (Gorj County Prefect
Institution), and each interview will take 3-5 minutes.
3.2 Design research
This research aims to study attitudes, opinions and perceptions of public
officials on human resources management in the Gorj County Prefect Institution. The
marketing research is an analysis that is applied to the evaluation of career civil
servants. The questionnaire was based on the research objectives and contains 12
questions. Questions are closed because providing the respondents with one or more
possible answers will simplify the processing and interpretation of data obtained. The
questionnaire contains both single-choice questions and multiple choice questions.
For the formulation of questions simple, easily understood words were chosen,
avoiding questions that suggest or imply some answers. Question wording was a
direct manner to facilitate the responses of subjects and to avoid certain
misinterpretations.
The questionnaire has a certain dynamic, a certain order of arrangement of questions.
The questionnaire begins with simple questions, general questions; then there are
questions which directly reach the issue of research and the most difficult questions
that require more time for thinking.
3.3. Planning work on sample of 60 civil servants
As the main method of communication with subjects we chose facing
investigations that are more complex, and could thus obtain a better control over the
conditions for interviews. During the interview, questions were read slowly, clearly,
respecting the rules on how to pose the questions. We can assume from experience
that the subjects will be happy to bring their contribution in carrying out this research.
Also some questions with a greater degree of complexity will be clarified, offering
explanations and guidance for the subjects without any influence on their opinions.
Market research on a sample of 60 civil
servants
23.06.10-25.06.10 2 days Planning activities
28.06.10-02.07.10 5 days Questioning sample
05.07.10-09.07.10 5 days Centralizing data collected
12.07.10-14.07.10 3 days Data analysis and conclusions drawn
3.4 Using Excel 2010 in processing questionnaire results
Processing the results of the questionnaire was developed by using Excel 2010
application from the MS Office package.
We present below some of the results after the centralization of the responses on the
assessment of the functioning of the Gorj County Prefect Institution:
1. Would it be necessary to improve the internal work of the institution?
2. Do you consider that the activities you carry out are the tasks of your job?
3. Do you consider that the job duty from your job description is consistent
with the Rules of Organization and Functioning of the institution?
19
1122
44
Largely
To a large extent
Aught
Small extent
At all
19
25
8
40 1
Largely
To a large extent
Aught
Small extent
At all
Blank Questionnaire
4. Note the transparency of the institution, with scores of 1-5 (1 designating
lowest degree of transparency, and 5 designating the highest) on:
- Annual Assessment
- Establishing training needs of staff
- The financial balance reasons
33
0
23
4Yes
No
Comments without a concrete answer
Blank Questionnaire
11
11
13
19
1-The lowest level of transparency
3
4
5-The highest level of transparency
23
99
10
8
1-The lowest level of transparency
2
3
4
5-The highest level of transparency
5. Indicate whether the assessment system used in the institution is based on
objective criteria for assessing the professional performance and ensuring
staff motivation to meet goals.
6. What non-financial motivation methods are applied to the institution? (You can
answer by selecting more options)
28
9
7
6
9
1-The lowest level of transparency
2
3
4
5-The highest level of transparency
22
20
6
12
Yes
No
Comments without a concrete answer
Blank Questionnaire
14
2317
0
3
13
7Promoting initiative
Merits recognition
Delegation
Climate of trust
Other
None
Blank Questionnaire
7. What methods of non-financial reasons you want to be applied within the
institution?
8. Do you consider that the system used in professional training is based on
actual needs arising out of your job description?
9. Do you consider that the system tries to motivate people in achieving their
objectives?
18
25
12
25
30
7 Promoting initiative
Merits recognition
Delegation
Climate of trust
Other
None
Blank Questionnaire
17
34
54 Yes
No
Comments without a concrete answer
Blank Questionnaire
17
36
40
Yes
No
Comments without a concrete answer
Blank Questionnaire
10. Do you consider that the material resources offered are enough in order to
effectively ensure that the objectives are met (individual and the general of the
institution)?
11. Note 1 to 5 (1 being the lowest and level 5 the highest degree) the effectiveness of
your communication with your:
Supervisor
Colleagues in the department
2
18
16
18
6 1
Largely
To a large extent
Aught
Small extent
At all
Blank Questionnaire
93
10
10
27
1-The lowest level of efficiency
2
3
4
5-Thehighest level of efficiency
0 1
6
2130
1-The lowest level of efficiency
2
3
4
5-The highest level of efficiency
Colleagues from other departments
12. Do you consider that a risk register would help the proper management of service
activities / objectives related to the compartment?
Conclusions
The organizational assessment questionnaire is the beginning of the institution's most
important resource: human resource. Among the 60 questionnaires collected, there are
a significant number of questionnaires which were left blank on some questions or
where undue negative aspects were reported.
In this way, it created the foundations for designing an effective management system
for ensuring and maintaining high quality internal activities and services provided to
citizens seeking:
Internal IP activity
To assess the activity of the internal Gorj County Prefect Institution employees one
considered responses to questions 1, 2, 3 and 12.
Evaluation, training, motivation, communication
For the analysis of activities and assessment, training and motivation of human
resources, one considered the answers to questions 4, 5, 6, 7, 8, 9, 11.
4
9
1419
13
1-The lowest level of efficiency
2
3
4
5-The highest level of efficiency
21
16
23
Yes
No
Blank Questionnaire
Resources
To identify needs relating to material resources one considered the responses
to question 10.
Activities
To identify the proposed activities of employees one considered responses to
questions 1, 3 and 4.
For efficiency, human resources work at the Gorj County Prefect Institution was
conducted based on core principles and has proven practical values, such as:
• sustained concentration and targeting capabilities and individual efforts to achieve
effective objectives of the institution;
• link in an integrated manner policy and human resources systems with the mission
and strategy of the institution;
• assessing the human factor as a key resource.
Recognizing that human resources management’s mission is to participate in the
institution's objectives by creating, maintaining and developing a flexible body of
highly skilled public servants, capable of providing high quality services, Human
Resources Department has pursued and achieved the following specific objectives:
• ensuring the functioning of human resource management activities;
• providing career development for civil servants;
• objective assessment of professional performance of public officials;
• concern presented for professional development.
The impact of the main results expected from implementing the strategy in the public
administration area are:
• improve the efficiency of the institution, by applying the elements of
strategic management and building and maintaining a quality culture;
• reduce non-quality costs, by reducing / eliminating errors and
streamlining the work of the institution;
• increased quality of services provided by the Gorj County Prefect
Institution;
• full involvement of the management team and executive staff in
achieving quality, due to increased awareness and training on quality
management;
• motivated human resources attached to the institution, due to the
awareness of their roles, missions and objectives included in the
Institution of the Prefect;
• customers with a high degree of knowledge regarding areas of
competence of the Gorj County Prefect Institution;
• needs, requirements and expectations;
• improved image of and increased confidence in the Gorj County
Prefect Institution.
Objectives for 2011 have been completed; work in human resources being limited, but
requiring new activities daily, according to priorities. Analyzing recruitment
questionnaires based on the application submitted, I noticed the lack of a specific
mechanism for public servants. Some suggestions would include:
• Creating a specialized recruitment mechanism possibly managed by Regional
Training Centre in Local Public Administration or outsourced as a service;
• Recruitment should be a task of the manager / human resource manager, which
maintains a constant connection with these resource centers so that the Regional
service that consistently provides information about public institutions contests offers
qualified personnel in an existing time on a particular specialty;
• Identifying and creating specialized facilities (wage) to attract and retain highly
skilled professionals in the system in the majors;
• Establishing a national testing system with the minimum criteria for those who want
to become civil servants, with different requirements depending on the category of
public official who is organizing the competition (eg for leading officials, should be
surprised that such tests psychological profile, the managerial skills of the person,
etc.).
• Creating and applying uniform criteria to organize competitions at local / regional
level
• Organizing contests for similar functions within regions (districts 2-3)
• Testing of persons to be appointed by NACS, to avoid replication of mediocrity in
the system (ie, an evaluator who himself knows a foreign language can automatically
test the candidate in this field).
Training and continuing education:
• A preliminary assessment of training needs of civil servants in order to harmonize
the supply of courses (National Institute of Administration, the Regional Centre, etc.);
• Reduce training costs by establishing a system of training hours / officer, and
training days;
• The popularization and widespread use of advanced methods of e-learning;
• Establish an objective and uniform system of selection of public officials to receive
training courses based on results of preliminary assessments of training needs of the
institution;
• Training services liberalization and encouraging the markets (where these services
are provided by nonprofit organizations accredited to the account of government
funding for training of civil servants through their agency training providers);
• Differentiated approach to the concept of training of civil servants:
• Initial training - conditions for entry into the system (entry to competitions) -
• Continuous training - improvement during their careers mandatory.
At evaluation stage it is necessary:
• Adapting the assessment criteria for each type of function to specific operations;
• Legal prerequisites to enable assessment outsourcing to specialized companies like
the National Agency of Civil Servants (NACS)
• Expanding the pilot project evaluation plan, the NACS representatives should train
human resources departments in making this type of evaluation, following that the
procedure will be applied regularly;
At control stage it is necessary:
• More effective monitoring of implementation of Law no. 7 / 2004 on the code of
conduct for civil servants;
• Strengthening the disciplinary committee's active role in the control / sanctions in
cases of deviation from the rules currently governing the performance of the civil
service;
• Organizing a committee of discipline at the county level to avoid the risk of
interpersonal ties that could affect the procedure, in small communities.
Motivation means:
• Creating a more flexible system of prize / award of wage increases at local
government level, adapted to the capacity of institutions / local authorities to attract
and manage funds, together with transparency mechanisms and criteria for the
granting of such premiums;
• Civil incompatibilities make such public office unattractive, especially for youth;
• With the limited funds allocated, the head of the institution should have more
flexibility in setting priorities - including a separate system for those poorly motivated
(in administration, a specialty of computer scientists is poor).
Promotion is an incentive for providing an efficient activity, and therefore must be
considered:
• Reassessment of the civil service promotion system so that the basic criterion is
competence, not seniority basis;
• Establish performance indicators for the institution.
In conclusion, the civil servant status in its present form creates all the premises for a
public service, similar to European governments and marks a setback in the process of
no politicization administration.
Regarding the case of the Gorj County Prefect Institution, the main step necessary at
this point would be to strengthen and improve the human resources team. The activity
of the department is currently limited to the interpretation and application of truncated
existing legislation.
One problem is the ambiguity of some of the laws and the fact that they leave room
for subjective interpretations.
Training civil servants and motivating them to engage effectively in highly complex
administrative processes and have an impact on the public should be the priority
objectives of any public institution.
The Statute of Civil Servants Act includes provisions that, properly applied, could
lead to improved work and performance. However, the law is not fully applied and
not in a uniform manner.
Human resource management is very limited and comes primarily in the power
ministries. There is a horizontal view on existing problems and any strategic plan to
address them. Reassessment is needed of the allocation of human resources at central
government level and an appropriate allocation of their priority areas. This could help
reduce problems caused by restructuting in many sectors of government.
Interpretation of results using Excel application is fast and very suggestive. Microsoft
Excel 2010 makes it possible to analyze, manage and share information in more ways
than before, helping you make better decisions, offering new visualization and
analysis tools to trace and highlight trends in data analysis. Also, it allows easy access
to important data, even if we are away from almost any Web browser or Smartphone.
It is possible to upload files to the Web to work together with others online.
Regardless of reports or analysis performed, Excel 2010 provides more flexibility and
efficiency to achieve your objectives by delivering new tools to help discover patterns
or trends that may lead to more informed decisions, improving the ability to analyze
data sets at large.
REFERENCES [1] Androniceanu, A., (2007) Noutăţi în managementul public, Ed. ASE,
Bucureşti, p.206
[2] Chivu, I. (2007) Dimensiunea resurselor umane, Editura Luceafărul,
Bucureşti
[3] Drucker, P.F., (2000) „Management: Tasks, Responsibilities, Practices‖,
Eight Edition, Butterworth Heinemann, Oxford,
[4] Gorun, A. (2007), Consideraţii privind conceptul de administraţie publică,
Revista de Ştiinţe Juridice
[5] Gorun, A. coord (2010), „Gorjul-repere strategice. Orizont 2030‖, Ed.
Academica Brâncuşi
[6] Lefter, V.; Deaconu A.; Marinaş C., Puia R. (2008), Managementul
resurselor umane. Teorie şi practică, Editura Economică, Bucureşti
[7] Johns G. (2007), Comportament organizaţional, Ed. Economică, Bucureşti
[8] Plumb I. (2007) – Managementul serviciilor publice, ASE Bucureşti ;
[9] Stanciu I.- (2007) „Managementul calităţii totale‖, Ed. Cartea Universitară,
Bucureşti, 2003
[10] Manolescu A.; Lefter V.; Deaconu A., coord. (2007), Managementul
Resurselor umane, Editura Economică, Bucureşti
[11] Matei, L. (2007), Management public, ed. a II-a, Editura: Economica,
Bucureşti,
[12] Plumb, I. (2007). – Managementul serviciilor publice, ASE Bucureşti
[13] Stancescu I., Popeanga V., (2008), The pressures on the human resources
management within the public sector, www.upet.ro/en/anale/economie/
[14] Tomescu I. R., (2007), Managementul instituţiilor publice, Editura
„Academica Brâncuşi‖ Tg-Jiu
[15] Vedinaş, V. (2009) Statutul funcţionarilor publici, Ed.Universul Juridic,
Bucureşti
[16] www.prefecturagorj.ro
Cooperation in banking between the national bank of Romania
and competent authorities in the European Union
Pirvu Elena Daniela , Titu Maiorescu University, Romania
Abstract
In Romania, the legal framework which regulates the legal regime of credit
institutions is Governmenr Emergency Ordinance no. 99/2006 on credit institutions
and capital adequacy, amended and approved by Law no. 227/2007.
This regulation includes also the legal framework for the activity of the authority
competent in the field, as well as the legal relations established between the national
authority and the competent authorities in other European Union member states.
Pursuant to provisions of Art. 4 par.(1), the authority competent as regards the
regulation, licensing and prudential supervision of credit institutions in the National
Bank of Romania.Moreover, this institution provides this activity as one of its main
responsabilities stipulated in Art.2 par. (2) of Law no. 312/2004 on the Statute of the
National Bank of Romania.In support of this competence, Art.25 par.(1) of the law
expressly mentions that “the National Bank of Romania has exclusive competence to
license credit institutions and is in charge with the prudential supervision of the credit
institutions which it has authorised to operate in Romania”; in the next paragraph,
the article stipulates the empowerment limits for the authority, with the declared
purpose of assuring the operating and viability of the banking system.
Keywords: competent authorities, banking system, credit institutions
Taking into account the social and economic importance of the prudencial supervision
of credit institutions in Romania, as well as the strong presence of foreign equity
participations in these institutions – following the globalization of the banking system
the close relationship which must exist between the national supervisory authority and
the competent authorities in other states is an intrinsic must, particularly in the case of
the countries where the credit institutions in the domestic banking system come
from.That is why, Art. 3 par.(6) of Law no. 312/2004 sets the legal grounds for the
National Bank of Romania to collaborate with competent authorities in EU member
states, so as to be empowered to provide ― the conditions needed for the fulfilment of
information exchange with these authorities‖. But, this information exchange must be
conducted under the terms set forth in Art.3 par.(10) of the law, complying with the
following three minimal requirements:
1. This information is subject to the requirements regarding keeping professional
secrecy.In this respect, this requirement is set forth in the provisions of Art. 52 in Law
no.312/2004 which regulates professional secrecy in the field. So, as regards
providing such information, it can be done only with the signature of the governor of
the National Bank of Ronania or other people empowered in this respect.
The wording ― in this respect‖ reflects the will of the legislator according to whom the
empowerment of these people by the National Bank of Romania governor – who,
pursuant to Art. 35 par. (3) of the same normative act ―represents the National Bank of
Romania in relation to third parties‖, is conducted precisely in order to provide
information under the terms set forth in Art.52 of the law. Therefore, we can make the
distinction between empowerment in this case and the one set forth in Art.35 par.(3)
on empowerment given for signing treaties and conventions on behalf of the National
Bank of Romania; and, at the same time, the distinction as regards the delegation of
responsibilities to the first-vice-governor and vice-governors as set forth in Art.35
par.(1) of the law, on the concrete attributions which are delegated ―under the terms
established by the Board‖.
In the same rationale, the legislator expressly established in Art.2 par.(4) that, when
exercising its duties as regards licensing, regulating and prudentially supervising
credit institutions, the National Bank of Romania can utilize the information received
pertaining to professional secrecy, only in one of the following cases :
a) checking the fulfilment of the conditions regarding the establishment of
credit institutions;
b)supervising, at individual and consolidated level, the business of credit
institutions; c) applying sanctions;
d) the credit institutions' disputing the administrative acts issued by the
National Bank of Romania.
Consequently, the National Bank of Romania shall not be in the capacity to utilize the
information received under the conditions of Art.3 of the law from other competent
authorities in other situutions which exceed the scope of Art.52 par.(4), since the
interpretation of this law text is stricto sensu.
2. The information provided by the National Bank of Romania shall be utilized by the
competent authorities to whom it has been exclusively communicated solely fot the
purpose of fulfilling their duties. The formulation ―fulfilling their duties‖ refers to the
duties of competent authorities as set forth in the relevant regulation in the legislation
of that respective country; the express provision in this regulation cannot be extended,
at one's own discretion. Moreover, our view is that the expansion of this scope by a
competent authority damages the grounds of getting this information, namely the
agreement concluded between parties.
3. The information received from a member state can be provided only with the
express agreement of the competent authority who has sent it and only for the
purposes for which there is an agreement in this respect. Here, we have a situation
similar to the above mentioned one, which, in this case, concerns the information
received by the National Bank of Romania and refers to its behavioural regime. The
central bank must obtain the express agreement of the competent authority which has
provided the information, an agreement which must be obtained before the
information utilization and which must be express as regards the respective utilization
for the purposes for which this information was obtained.
Only if the minimal legal requirements are cumulatively fulfilled, the provided
information can be utilized by parties as set forth by the law and the contracts
concluded by them at the negotiation and conclusion of the bilateral collaboration
document. As we can see, the Law on the National Bank of Romania Statute sets the
legal grounds for the establishing of the collaboration between this institution and
competent authorities, in order to conduct an adequate prudential supervision of credit
institutions.
Romania's joining the European Union on 1 January 2007 brought about the adopting
of new regulations for credit institutions at the very end of the year 2006.
In this respect, we must mention Government Emergency Ordinance no.99/2006 on
credit institutions and capital adequacy, published in the Romanian Official Gazette
no.1027/27 December 2006. This normative act represents a transposition in the
Romanian legislation of the relevant Community directive adopted by the European
Parliament and the European Union Council, in the same year. That is why, the
principles set forth in the Community act are to be found in the Romanian normative
act as well.
Firstly, we must mention that both normative acts stipulate the wording
―competent authorities‖, defined under point 4 of Art.in Directive 2006/48/CE of 14
June 2006 on the initiation and exercising of the business of credit institutions, as
meaning the national authorities empowered – on the grounds of an act binding as a
law or an administrative norm, to supervise the business of credit institutions, and
under point 2 of Art.7 par.(1) of the Government Emergency Ordinance no.99/2006 as
being the national authority empowered by law or other regulations to prudentially
supervise credit institutions. Apparently, the two definitions are identical, but, in
reality, they are suitable for a comparative analysis. It is obvious that both refer to the
national authorities who exercise such a power – prudential supervision of credit
institutions, on the national territory, having their competence set forth in a normative
act adopted in that respective state. What actually differs is the fact that, in the first
definition, they mention the authority empowered based on an act binding as a law or
an administrative norm, while in the second definition they refer, in a much more
concrete manner, to an empowerment by law or other regulations. After analysing
these wordings, we can reach the conclusion that if the notion ―act binding as a law‖
has a wider scope than the law, the notion ―other regulations‖ includes a much wider
scope than the ―administrative norm‖ mentioned in the European Directive. If we
were to mention the example of the Romanian regulation of the competent authority,
we could say that it has found expression – in conformity with the Romanian law, in
Law no.312/2006, both in Art.2 and in Art.25.
Nevertheless, we must remark that the normative act which regulates the entire
activity related to the prudential supervision of credit institutions is a Government
ordinance which is not a law-stricto sensu-but an act binding as a law from a
constitutional point of view, in conformity with its formulation, thus answering the
definition in the European Directive, but also the wide scope which the notion ―other
regulation‖ implies in the Romanian legislation. Moreover, we consider that, taking
into account the socio-economic importance and the effects implied by the activity of
such a national authority, its empowerment is justified only by its inclusion in a law or
an act binding as a law, which could offer it the power and legal authority that such a
normative act brings about.
Passing now to the legal framework offered by the Romanian law as regards the
collaboration between competent authorities in EU member states, we shall try to
point out the scope of this collaboration. As concerns regulation, the national authority
benefits from the European directives in the field, which implies the fact that all
competent authorities in EU states shall regulate the field having as grounds the same
European normative acts, as regards licensing and prudential supervision of credit
institutions – inspired by the same source, they will regulate, but at the same time
resorting to the possibilities offered by the collaboration with competent authorities in
other EU member states.
In this spirit, we think, should be read the provision in Art.37 of Government
Emergencz Ordinance no.99I2006 referring to the consultations of the National Bank
of Romania with the competent authorities of a member state involved, before
licensing a credit institution, Romanian legal person. Such consultation should take
place only if it refers to one of the situations requesting this consultation. The
situations are expressly set forth by law and refer to the fact that the respective credit
institution, Romanian legal person, is either an affiliate of a credit institution licensed
in the respective member state, or an affiliate of the parent company of the credit
institution licensed in that state, or is controlled by the same persons who control a
credit institution in the respective member state.
This consultation, requested by law, is justified by the fact the competent
authority in the member state has useful information, resulting from its own process
of licensing and supervision of the credit institution which is in one of the mentioned
relations with the credit institution Romanian legal person that is to be licensed, as
well as from the common interest of both competent authorities regarding the
supervision of the credit institution on the national territory of each one. Moreover, in
par. (3) of the same article, in support of this rationale, it is mentioned expressly that
the information exchange is relevant not only for being granted a license by the
National Bank of Romania but also for the ongoing assessment of compliance with
business conditions. The same law text refers also to the information content for
which the consultation takes place, stipulating that the authorities must be consulted
especially in the context of assessing the shareholders' quality and the reputation and
experience of the persons involed in administering and managing another entity in the
same group, who are to be entrusted duties in the operative administering or
management of credit institution, Romanian legal person.
In the chapter on the regime of credit institutions in other member states, the
collaboration between competent authorities plays an essential role. Thus, considering
the license granted by the competent authority in the home member state, the
respective credit institution can deploy, in conformity with Art. 45 par. (1) in the
Government Emergency Ordinance no.99/2006, in Romania, the business permitted
by the Romanian legislation, by establishing branches and by providing services
directly, on condition that this business be mentioned in the license granted by the
competent authority of that state and that compliance with the Romanian legislation
adopted to protect general interest be assured. Concretely, Art.46 sets forth that, when
establishing a branch by such a credit institution, there is no need to get a license from
the National Bank of Romania or to provide endowment capital for that branch.In this
case, the National Bank of Romania will register it in its credit institution' Register,
based on the notification set forth in Art. 48, notification submitted by the competent
authority of the home member state, accompanied by the data and information
requested by the provisions of par. (2) of the same article.
Similary, any intention to change this information must be notified to the
National Bank of Romania by the respective credit institution, at least one month
before the date when the change is to be made.
Based also a notification submitted to the National Bank of Romania by the
competent authority of the home member state – including the lines of business that a
credit institution licensed and supervised by it intends to deploy in Romania, the
respective credit institution will be able to provide services directly on our national
territory. Moreover, credit institutions from other member states shall notify the
National Bank of Romania when opening representative offices in Romania, in
conformity with Art.53.
The natural consequence of a notification regarding a branch or providing
services directly in Romania is the provisions of Art. 60, according to which, in case
the respective credit institution does not comply with the Romanian regulations in the
field the National Bank of Romania – after having requested that credit institution to
take measures to remedy the situation within a certain time limit and the latter has not
complied, can inform the competent authority of the home member state to dispose
the measures deemed appropriate. If the credit institution keeps breaching the
Romania legislation in force, the National Bank of Romania – after informing the
competent authority in the home member state, can dispose measures for the
prevention or sanctioning of the law breaches, including preventing the delinquent
credit institution to initiate new transactions on the territory of Romania.
Similarly, the same regime is applied to credit institutions licensed and supervised
by the National Bank of Romania, when they intend to deploy lines of business
allowed by law in other member states, by establishing branches or by providing
services directly. In these cases, the National Bank of Romania – based on the request
of the credit institution Romanian legal person, accompanied by the data and
information as set forth in Art.81, submits them to the competent authority in the host
member state, together with information on the level of the equity and the capital
requirements of the credit institution.
The provision in Art. 85 must be contemplated as a provision similar with the one
in Art. 60, namely when the competent authority in the host member state informs the
National Bank of Romania that a credit institution Romanian legal person that deploys
business in that state, though warned, has not complied with the legal provisions of
that state; then, the Romanian competent authority will take, at once, the appropriate
measures for the ceasing of the facts mentioned, measures which it communicates to
the competent authority in the host member state as well.
We must read – as an acknowledgement of the cooperation of the competent
authorities in the two states and observance by the Romania legislation of the
community directive, the provision of par. (3) of Art.85, setting forth that the acts
issued by the competent authorities in the host member state – about which the
National Bank of Romania has been informed, through which measures are taken or
sanctions applied on the credit institution Romanian legal person, are recognised and
produce legal effects in Romania. Such a provision demonstrates that the Romanian
law applies appropriately the express provisions of Art.30 par. (3) of Directive C.E.
no. 48/14, June 2006 on the powers of competent authorities in the host member state.
We must read with a similar approach the imperative provision in Art.86 of the
Government Emergency Ordinance no.99/2006, according to which „the credit
institution Romanian legal person deploying business on the territory of another
member state in subject to the legal provisions in force in the host member state,
adopted to protect general interest and to the measures or sanctions ordered by the
authorities of that respective member state‖.
The expression of the cooperation of competent authorities as redards the
prudential supervision of credit institutions is reflected also in the provision of Title
III of the emergency ordinance on prudential supervision. Thus, Art. 172 setting forth
that the National Bank of Romania assures the prudential supervision of credit
institutions Romanian lagal persons deploying business in other member states,
stipulates that this principle does not exclude the right of the competent authority in
the host member state to exercise its competence as regards implementing its own
monetary policy, reporting requirements for statistics purposes or liquidity
requirements. Moreover, Art.173, strengthening the principle of collaboration between
the National Bank of Romania and competent authorities in host member states in
such situations, stipulates in par. (2) that during this collaboration, the exchange of all
information regarding the management and the shareholders of the credit institution
Romanian lagal person is assured in order to facilitate its supervision and assess its
compliance with the conditions set at the time of the licensing as well as the exchange
of all information, in order to facilitate the ongoing verification of the business of that
credit institution, particularly as regards liquidity, solvency, the deposit guarantee
scheme, limiting large exposures, administrative and accounting procedures and the
internal control mechanisms. In order to verify the business of the branches set up in
other member states by credit institutions Romanian legal persons, the National Bank
of Romania can, according to Art. 174, conduct verifications at the premises of these
branches, after having previously informed the competent authorities in the host
member states or it can request the performing of verifications by these authorities,
when exercising their competences, situation in which, the Natioanal Bank of
Romania, via its supervisors, can take part to the performing of verifications, if it
deems it necessary.
The collaboration with the competent authorities in other member states is carried
out also as regards consolidated supervision, including in the cases when parties can
decide jointly not to apply the criteria in the field included in the provisions of Art.
176 par. (1) let.c) – e), cases when, before taking a decision, the competent authorities
must grant the possibility to express their opinion on that respective decision to the
parent credit institution from the European Union, or to the holding parent financial
company from the EU, or to the credit institution with the biggest total balance sheet
assets, as the case may be. Moreover, the legislator stipulates that any agreement
concluded in this respect by competent authorities must be notified to the European
Commission.
Aspects of the cooperation of the National Bank of Romania with competent
authorities in home member states as redards exercising the supervision of credit
institutions from other member states deploying business in Romania are included in
the provisions of Art. 208 – 211, where we find the position of the National Bank of
Romania as the competent authority in the host member state, with a role identical
with the one that the competent authorities in member states had in relation with the
National Bank of Romania when they were host member states. Also, the emergency
ordinance sets forth the rights and obligations of competent authorities as regards the
exchange of information and professional secrecy.
On the other hand, Art. 43 sets forth, as the effect of withdrawal of the credit
institution license or, as the case may be, of the termination of its validity, the
submission of notifications by the National Bank of Romania, without delay, to both
the European Commission as well as to the competent authorities in host member
states.Such communication is extremely important for these authorities, who, being
informed, in due time, about the measure taken, will be able to act so as to
considerably limit the consequences if the respective credit institution conducts
operations on the territory of these states. Moreover, the legal grounds which allow
and, at the same, oblige the National Bank of Romania to inform the competent
authorities in host member states as regards such an event are represented by Art. 88,
which supplements the provisions of Art. 43, by stipulating that the National Bank of
Romania's informing will refer to „including the consequences of the license
withdrawal‖, which can have an even greater importance for the respective authorities
that monitor the credit institution in the situation mentioned, concerning the
operations conducted on the territories of these states.
In the same line of thought we must also read Art.259 which strengthens the
celerity character of the information submitted by the National Bank of Romania to
the competent authorities in host member states by the wordings „informs without
delay, by any available means .... on the adopted decisions, their legal consequences
and the effects they involve‖ (par. 1) or „ the National Bank of Romania assures the
informing set forth in par. (1) immediately after adopting the decision‖ (par.2).
On the other hand, from Art. 64, we can infer the similar obligation of the competent
authority in the home member state when such an event takes place , i.e. being
obliged to inform the National Bank of Romania, while the latter in empowered –
based on this law text, to take „the measures necessary to prevent the credit institution
from initiating new transactions on the territory of Romania and to assure protection
of the interests of depositors and other creditors‖. If we consider only the obligation
of mutual informing in such a case and it is enough to appreciate how important for a
competent authority in a member state can be to know the moment and consequences
when a foreign credit institution acting on its territory does not hold a valid license
any longer.
Moreover, in priciple, Art. 215 of the Government Emergency Ordinance no.
99/2006, and Art. 3 of Law no. 312/2004 on the Statute of the National Bank of
Romania offer this institution, considering its quality of authority competent to
license, regulate and prudentially supervise credit institutions on the territory of
Romania, the possibility to exchange information with the competent authorities in
the other member states. Nevertheless, the text stipulates that this exchange can
happen only „according to the provisions of this emergency ordinance and other
normative acts applicable to credit institutions‖This information is subject to, in
conformity with par. (2) of Art. 215, the requirements regarding professional secrecy
set forth in Art. 214 and, of course, to the conditions set by the provisions of Art. 52 of
Law no. 312/2004.
In this very spirit, the National Bank of Romania has concluded agreements with
the competent authorities of other member states, especially with those in the home or
host states of the credit institutions operating in Romania.
Conclusion The beneficial character of legal provisions quoted is reflected in the daily business of
competent authorities who, thus, hold information and use the means needed to assure
a qualitative prudential supervision of credit institutions, being able to prevent
negative consequences for the viability of the banking system and protecting the
interests of depositors and other creditors.
References:
[1] Asociatia consilierilor juridici din sitemul financiar-bancar (Bucuresti), ‖LEGAL
ISSUES IN BANKING FIELD‖, Editura ―Wolters Kluwer‖, Romania
[2] Universitatea ―Babes-Bolyai‖(Cluj-Napoca) Facultatea de Drept, ‖LEGAL
ISSUES IN BANKING FIELD‖, Editura: ―Wolters Kluwer‖, Romania
[3] ‖STATUTE OF NATIONAL BANK OF ROMANIA‖, Law no.312/2004
[4] ‖GOVERNMENT EMERGENCY ORDINANCE nO.99/2006
Monetary Policy and Economic Policy
Iordachioaia Adelina-Geanina, Titu Maiorescu University, Romania
Abstract: There is widespread agreement that monetary policy matters,but there is
disagreement about how it should be conducted. Behind this disagreement lie
differences in theoretical understandings. The paper contrasts the New Classical,
Neo-Keynesian, and Post-Keynesian frameworks, there by surfacing the differences.
The New Classical model has policy only affecting long run inflation. The Neo-
Keynesian has policy impacting inflation, unemployment , and real wages. The Post-
Keynesian model also impacts growth, so policy implicitly picks a quadruple.
Inflation targeting is a sub-optimal policy frame because it biases decisions toward
low inflation by obscuring the fact that policy also affects unemployment, real wages,
and growth.
Keywords: monetary policy , inflation targeting, New Classical , Neo-Keynesian,
Post- Keynesian
Introduction
Monetary Policy involves changes in the base rate of interest to influence the rate of
growth of aggregate demand, the money supply and ultimately price inflation.
Monetarist economists believe that monetary policy is a more powerful weapon than
fiscal policy in controlling inflation. Monetary policy also involves changes in the
value of the exchange rate since fluctuations in the currency also impact on
macroeconomic activity (incomes, output and prices).
Changes in short term interest rates affect the spending and savings behaviour of
households and businesses over time and therefore feed through the circular flow of
income and spending. The transmission mechanism of monetary policy works with
variable time lags depending on the interest elasticity of demand for different goods
and services – e.g. the demand for interest-sensitive consumer goods and services
bought on credit or the demand for capital investment from private sector businesses.
Because of the time lags involved in setting an appropriate level of short-term interest
rates, the Bank of England sets nominal interest rates on the basis of hitting the
inflation target over a two year forecasting horizon.
Theory
Monetary policy is the process by which the government, central bank, or monetary
authority of a country controls the supply of money, availability of money, and cost of
money or rate of interest to attain a set of objectives oriented towards the growth and
stability of the economy. Monetary theory provides insight into how to craft optimal
monetary policy. Monetary policy rests on the relationship between the rates of
interest in an economy, that is the price at which money can be borrowed, and the
total supply of money. Monetary policy uses a variety of tools to control one or both
of these, to influence outcomes like economic growth, inflation, exchange rates with
other currencies and unemployment. Where currency is under a monopoly of
issuance, or where there is a regulated system of issuing currency through banks
which are tied to a central bank, the monetary authority has the ability to alter the
money supply and thus influence the interest rate (to achieve policy goals).
It is important for policymakers to make credible announcements. If private agents
(consumers and firms) believe that policymakers are committed to lowering inflation,
they will anticipate future prices to be lower than otherwise (how those expectations
are formed is an entirely different matter; compare for instance rational expectations
with adaptive expectations). If an employee expects prices to be high in the future, he
or she will draw up a wage contract with a high wage to match these prices. Hence,
the expectation of lower wages is reflected in wage-setting behavior between
employees and employers (lower wages since prices are expected to be lower) and
since wages are in fact lower there is no demand pull inflation because employees are
receiving a smaller wage and there is no cost push inflation because employers are
paying out less in wages. To achieve this low level of inflation, policymakers must
have credible announcements; that is, private agents must believe that these
announcements will reflect actual future policy. If an announcement about low-level
inflation targets is made but not believed by private agents, wage-setting will
anticipate high-level inflation and so wages will be higher and inflation will rise. A
high wage will increase a consumer's demand (demand pull inflation) and a firm's
costs (cost push inflation), so inflation rises. Hence, if a policymaker's announcements
regarding monetary policy are not credible, policy will not have the desired effect.
If policymakers believe that private agents anticipate low inflation, they have an
incentive to adopt an expansionist monetary policy (where the marginal benefit of
increasing economic output outweighs the marginal cost of inflation); however,
assuming private agents have rational expectations, they know that policymakers have
this incentive. Hence, private agents know that if they anticipate low inflation, an
expansionist policy will be adopted that causes a rise in inflation. Consequently,
(unless policymakers can make their announcement of low inflation credible), private
agents expect high inflation. This anticipation is fulfilled through adaptive expectation
(wage-setting behavior); so, there is higher inflation (without the benefit of increased
output). Hence, unless credible announcements can be made, expansionary monetary
policy will fail.
Announcements can be made credible in various ways. One is to establish an
independent central bank with low inflation targets (but no output targets). Hence,
private agents know that inflation will be low because it is set by an independent
body. Central banks can be given incentives to meet targets (for example, larger
budgets, a wage bonus for the head of the bank) to increase their reputation and signal
a strong commitment to a policy goal. Reputation is an important element in monetary
policy implementation. But the idea of reputation should not be confused with
commitment.
While a central bank might have a favorable reputation due to good performance
in conducting monetary policy, the same central bank might not have chosen any
particular form of commitment (such as targeting a certain range for inflation).
Reputation plays a crucial role in determining how much would markets believe the
announcement of a particular commitment to a policy goal but both concepts should
not be assimilated. Also, note that under rational expectations, it is not necessary for
the policymaker to have established its reputation through past policy actions; as an
example, the reputation of the head of the central bank might be derived entirely from
his or her ideology, professional background, public statements, etc.
In fact it has been argued that to prevent some pathologies related to the time
inconsistency of monetary policy implementation (in particular excessive inflation),
the head of a central bank should have a larger distaste for inflation than the rest of
the economy on average. Hence the reputation of a particular central bank is not
necessary tied to past performance, but rather to particular institutional arrangements
that the markets can use to form inflation expectations.
Despite the frequent discussion of credibility as it relates to monetary policy, the
exact meaning of credibility is rarely defined. Such lack of clarity can serve to lead
policy away from what is believed to be the most beneficial. For example, capability
to serve the public interest is one definition of credibility often associated with central
banks. The reliability with which a central bank keeps its promises is also a common
definition. While everyone most likely agrees a central bank should not lie to the
public, wide disagreement exists on how a central bank can best serve the public
interest. Therefore, lack of definition can lead people to believe they are supporting
one particular policy of credibility when they are really supporting another.
History of monetary policy
Monetary policy is primarily associated with interest rate and credit. For many
centuries there were only two forms of monetary policy: Decisions about coinage;
Decisions to print paper money to create credit. Interest rates, while now thought of as
part of monetary authority, were not generally coordinated with the other forms of
monetary policy during this time. Monetary policy was seen as an executive decision,
and was generally in the hands of the authority with seigniorage, or the power to coin.
With the advent of larger trading networks came the ability to set the price between
gold and silver, and the price of the local currency to foreign currencies. This official
price could be enforced by law, even if it varied from the market price.
Paper money called "jiaozi" originated from promissory notes in 7th century
China. Jiaozi did not replace metallic currency, and were used alongside the copper
coins. The successive Yuan Dynasty was the first government to use paper currency
as the predominant circulating medium. In the later course of the dynasty, facing
massive shortages of specie to fund war and their rule in China, they began printing
paper money without restrictions, resulting in hyperinflation.
With the creation of the Bank of England in 1694, which acquired the
responsibility to print notes and back them with gold, the idea of monetary policy as
independent of executive action began to be established. The goal of monetary policy
was to maintain the value of the coinage, print notes which would trade at par to
specie, and prevent coins from leaving circulation. The establishment of central banks
by industrializing nations was associated then with the desire to maintain the nation's
peg to the gold standard, and to trade in a narrow band with other gold-backed
currencies. To accomplish this end, central banks as part of the gold standard began
setting the interest rates that they charged, both their own borrowers, and other banks
who required liquidity. The maintenance of a gold standard required almost monthly
adjustments of interest rates.
During the 1870-1920 period, the industrialized nations set up central banking
systems, with one of the last being the Federal Reserve in 1913. By this point the role
of the central bank as the "lender of last resort" was understood. It was also
increasingly understood that interest rates had an effect on the entire economy, in no
small part because of the marginal revolution in economics, which demonstrated how
people would change a decision based on a change in the economic trade-offs.
Monetarist macroeconomists have sometimes advocated simply increasing the
monetary supply at a low, constant rate, as the best way of maintaining low inflation
and stable output growth. However, when U.S. Federal Reserve Chairman Paul
Volcker tried this policy, starting in October 1979, it was found to be impractical,
because of the highly unstable relationship between monetary aggregates and other
macroeconomic variables. Even Milton Friedman acknowledged that money supply
targeting was less successful than he had hoped, in an interview with the Financial
Times on June 7, 2003. Therefore, monetary decisions today take into account a wider
range of factors, such as:
short term interest rates;
long term interest rates;
velocity of money through the economy;
exchange rates;
credit quality;
bonds and equities (corporate ownership and debt);
government versus private sector spending/savings;
international capital flows of money on large scales;
financial derivatives such as options, swaps, futures contracts, etc.
A small but vocal group of people advocate for a return to the gold standard (the
elimination of the dollar's fiat currency status and even of the Federal Reserve Bank).
Their argument is basically that monetary policy is fraught with risk and these risks
will result in drastic harm to the populace should monetary policy fail. Others see
another problem with our current monetary policy. The problem for them is not that
our money has nothing physical to define its value, but that fractional reserve lending
of that money as a debt to the recipient, rather than a credit, causes all but a small
proportion of society (including all governments) to be perpetually in debt.
In fact, many economists disagree with returning to a gold standard. They argue that
doing so would drastically limit the money supply, and throw away 100 years of
advancement in monetary policy. The sometimes complex financial transactions that
make big business (especially international business) easier and safer would be much
more difficult if not impossible. Moreover, shifting risk to different people/companies
that specialize in monitoring and using risk can turn any financial risk into a known
dollar amount and therefore make business predictable and more profitable for
everyone involved. Some have claimed that these arguments lost credibility in the
global financial crisis of 2008-2009.
Trends in central banking
The central bank influences interest rates by expanding or contracting the
monetary base, which consists of currency in circulation and banks' reserves on
deposit at the central bank. The primary way that the central bank can affect the
monetary base is by open market operations or sales and purchases of second hand
government debt, or by changing the reserve requirements. If the central bank wishes
to lower interest rates, it purchases government debt, thereby increasing the amount of
cash in circulation or crediting banks' reserve accounts. Alternatively, it can lower the
interest rate on discounts or overdrafts (loans to banks secured by suitable collateral,
specified by the central bank). If the interest rate on such transactions is sufficiently
low, commercial banks can borrow from the central bank to meet reserve
requirements and use the additional liquidity to expand their balance sheets,
increasing the credit available to the economy. Lowering reserve requirements has a
similar effect, freeing up funds for banks to increase loans or buy other profitable
assets.
A central bank can only operate a truly independent monetary policy when the
exchange rate is floating. If the exchange rate is pegged or managed in any way, the
central bank will have to purchase or sell foreign exchange. These transactions in
foreign exchange will have an effect on the monetary base analogous to open market
purchases and sales of government debt; if the central bank buys foreign exchange,
the monetary base expands, and vice versa. But even in the case of a pure floating
exchange rate, central banks and monetary authorities can at best "lean against the
wind" in a world where capital is mobile.
Accordingly, the management of the exchange rate will influence domestic
monetary conditions. To maintain its monetary policy target, the central bank will
have to sterilize or offset its foreign exchange operations. For example, if a central
bank buys foreign exchange (to counteract appreciation of the exchange rate), base
money will increase. Therefore, to sterilize that increase, the central bank must also
sell government debt to contract the monetary base by an equal amount. It follows
that turbulent activity in foreign exchange markets can cause a central bank to lose
control of domestic monetary policy when it is also managing the exchange rate.
In the 1980s, many economists began to believe that making a nation's central bank
independent of the rest of executive government is the best way to ensure an optimal
monetary policy, and those central banks which did not have independence began to
gain it. This is to avoid overt manipulation of the tools of monetary policies to effect
political goals, such as re-electing the current government. Independence typically
means that the members of the committee which conducts monetary policy have long,
fixed terms. Obviously, this is a somewhat limited independence.
In the 1990s, central banks began adopting formal, public inflation targets with the
goal of making the outcomes, if not the process, of monetary policy more transparent.
In other words, a central bank may have an inflation target of 2% for a given year, and
if inflation turns out to be 5%, then the central bank will typically have to submit an
explanation. The Bank of England exemplifies both these trends. It became
independent of government through the Bank of England Act 1998 and adopted an
inflation target of 2.5% RPI (now 2% of CPI). The debate rages on about whether
monetary policy can smooth business cycles or not. A central conjecture of Keynesian
economics is that the central bank can stimulate aggregate demand in the short run,
because a significant number of prices in the economy are fixed in the short run and
firms will produce as many goods and services as are demanded (in the long run,
however, money is neutral, as in the neoclassical model). There is also the Austrian
school of economics, which includes Friedrich von Hayek and Ludwig von Mises's
arguments, but most economists fall into either the Keynesian.
Developing countries
Developing countries may have problems establishing an effective operating
monetary policy. The primary difficulty is that few developing primary difficulty is
that few developing countries have deep markets in government debt. The matter is
further complicated by the difficulties in forecasting money demand and fiscal
pressure to levy the inflation tax by expanding the monetary base rapidly. In general,
the central banks in many developing countries have poor records in managing
monetary policy. This is often because the monetary authority in a developing country
is not independent of government, so good monetary policy takes a backseat to the
political desires of the government or are used to pursue other non-monetary goals.
For this and other reasons, developing countries that want to establish credible
monetary policy may institute a currency board or adopt dollarization. Such forms of
monetary institutions thus essentially tie the hands of the government from
interference and, it is hoped, that such policies will import the monetary policy of the
anchor nation. Recent attempts at liberalizing and reforming financial markets
(particularly the recapitalization of banks and other financial institutions in Nigeria
and elsewhere) are gradually providing the latitude required to implement monetary
policy frameworks by the relevant central banks.
Types of monetary policy
In practice, to implement any type of monetary policy the main tool used is
modifying the amount of base money in circulation. The monetary authority does this
by buying or selling financial assets (usually government obligations). These open
market operations change either the amount of money or its liquidity (if less liquid
forms of money are bought or sold). The multiplier effect of fractional reserve
banking amplifies the effects of these actions.
Constant market transactions by the monetary authority modify the supply of currency
and this impacts other market variables such as short term interest rates and the
exchange rate. The distinction between the various types of monetary policy lies
primarily with the set of instruments and target variables that are used by the
monetary authority to achieve their goals.
Monetary Policy: Target Market
Variable: Long Term Objective:
Inflation Targeting Interest rate on overnight
debt A given rate of change in the CPI
Price Level
Targeting
Interest rate on overnight
debt A specific CPI number
Monetary
Aggregates
The growth in money
supply A given rate of change in the CPI
Fixed Exchange
Rate
The spot price of the
currency The spot price of the currency
Gold Standard The spot price of gold Low inflation as measured by the
gold price
Mixed Policy Usually interest rates Usually unemployment + CPI
change
The different types of policy are also called monetary regimes, in parallel to exchange
rate regimes. A fixed exchange rate is also an exchange rate regime; The Gold
standard results in a relatively fixed regime towards the currency of other countries on
the gold standard and a floating regime towards those that are not. Targeting inflation,
the price level or other monetary aggregates implies floating exchange rate unless the
management of the relevant foreign currencies is tracking exactly the same variables
(such as a harmonized consumer price index).
Inflation targeting
Under this policy approach the target is to keep inflation, under a particular definition
such as Consumer Price Index, within a desired range. The inflation target is achieved
through periodic adjustments to the Central Bank interest rate target. The interest rate
used is generally the interbank rate at which banks lend to each other overnight for
cash flow purposes. Depending on the country this particular interest rate might be
called the cash rate or something similar. The interest rate target is maintained for a
specific duration using open market operations. Typically the duration that the interest
rate target is kept constant will vary between months and years. This interest rate
target is usually reviewed on a monthly or quarterly basis by a policy committee.
Changes to the interest rate target are made in response to various market indicators in
an attempt to forecast economic trends and in so doing keep the market on track
towards achieving the defined inflation target. For example, one simple method of
inflation targeting called the Taylor rule adjusts the interest rate in response to
changes in the inflation rate and the output gap. The rule was proposed by John B.
Taylor of Stanford University. The inflation targeting approach to monetary policy
approach was pioneered in New Zealand. It is currently used in Australia, Brazil,
Canada, Chile, Colombia, the Eurozone, New Zealand, Norway, Iceland, Philippines,
Poland, Sweden, South Africa, Turkey, and the United Kingdom.
Price level targeting
Price level targeting is similar to inflation targeting except that CPI growth in one
year over or under the long term price level target is offset in subsequent years such
that a targeted price-level is reached over time, e.g. five years, giving more certainty
about future price increases to consumers. Under inflation targeting what happened in
the immediate past years is not taken into account or adjusted for in the current and
future years.
Monetary aggregates
In the 1980s, several countries used an approach based on a constant growth in
the money supply. This approach was refined to include different classes of money
and credit (M0, M1 etc.). In the USA this approach to monetary policy was
discontinued with the selection of Alan Greenspan as Fed Chairman. This approach is
also sometimes called monetarism. While most monetary policy focuses on a price
signal of one form or another, this approach is focused on monetary quantities.
Fixed exchange rate
This policy is based on maintaining a fixed exchange rate with a foreign currency.
There are varying degrees of fixed exchange rates, which can be ranked in relation to
how rigid the fixed exchange rate is with the anchor nation. Under a system of fiat
fixed rates, the local government or monetary authority declares a fixed exchange rate
but does not actively buy or sell currency to maintain the rate. Instead, the rate is
enforced by non-convertibility measures (e.g. capital controls, import/export licenses,
etc.). In this case there is a black market exchange rate where the currency trades at its
market/unofficial rate. Under a system of fixed-convertibility, currency is bought and
sold by the central bank or monetary authority on a daily basis to achieve the target
exchange rate. This target rate may be a fixed level or a fixed band within which the
exchange rate may fluctuate until the monetary authority intervenes to buy or sell as
necessary to maintain the exchange rate within the band. (In this case, the fixed
exchange rate with a fixed level can be seen as a special case of the fixed exchange
rate with bands where the bands are set to zero.) Under a system of fixed exchange
rates maintained by a currency board every unit of local currency must be backed by a
unit of foreign currency (correcting for the exchange rate). This ensures that the local
monetary base does not inflate without being backed by hard currency and eliminates
any worries about a run on the local currency by those wishing to convert the local
currency to the hard (anchor) currency.
Under dollarization, foreign currency (usually the US dollar, hence the term
"dollarization") is used freely as the medium of exchange either exclusively or in
parallel with local currency. This outcome can come about because the local
population has lost all faith in the local currency, or it may also be a policy of the
government (usually to rein in inflation and import credible monetary policy). These
policies often abdicate monetary policy to the foreign monetary authority or
government as monetary policy in the pegging nation must align with monetary policy
in the anchor nation to maintain the exchange rate. The degree to which local
monetary policy becomes dependent on the anchor nation depends on factors such as
capital mobility, openness, credit channels and other economic factors.
Gold standard
The gold standard is a system in which the price of the national currency is
measured in units of gold bars and is kept constant by the daily buying and selling of
base currency to other countries and nationals. (i.e. open market operations, cf.
above). The selling of gold is very important for economic growth and stability.
The gold standard might be regarded as a special case of the "Fixed Exchange
Rate" policy. And the gold price might be regarded as a special type of "Commodity
Price Index". Today this type of monetary policy is not used anywhere in the world,
although a form of gold standard was used widely across the world between the mid-
19th century through 1971. Its major advantages were simplicity and transparency.
(See also: Bretton Woods system). The major disadvantage of a gold standard is that
it induces deflation, which occurs whenever economies grow faster than the gold
supply. When an economy grows faster than its money supply, the same amount of
money is used to execute a larger number of transactions. The only way to make this
possible is to lower the nominal cost of each transaction, which means that prices of
goods and services fall, and each unit of money increases in value. Deflation can
cause economic problems, for instance, it tends to increase the ratio of debts to assets
over time. As an example, the monthly cost of a fixed-rate home mortgage stays the
same, but the dollar value of the house goes down, and the value of the dollars
required to pay the mortgage goes up. William Jennings Bryan rose to national
prominence when he built his historic (though unsuccessful) 1896 presidential
campaign around the argument that deflation caused by the gold standard made it
harder for everyday citizens to start new businesses, expand their farms, or build new
homes.
Policy of various nations
Australia - Inflation targeting
Brazil - Inflation targeting
Canada - Inflation targeting
Chile - Inflation targeting
China - Monetary targeting and targets a currency basket
Colombia - Inflation targeting
Eurozone - Inflation targeting
Hong Kong - Currency board (fixed to US dollar)
India - Multiple indicator approach
New Zealand - Inflation targeting
Norway - Inflation targeting
Singapore - Exchange rate targeting
South Africa - Inflation targeting
Switzerland - Inflation targeting [16]
Turkey - Inflation targeting
United Kingdom - Inflation targeting, alongside secondary targets on 'output
and employment'.
United States - Mixed policy (and since the 1980s it is well described by the
"Taylor rule," which maintains that the Fed funds rate responds to shocks in
inflation and output)
Monetary policy tools
Monetary base
Monetary policy can be implemented by changing the size of the monetary base.
This directly changes the total amount of money circulating in the economy. A central
bank can use open market operations to change the monetary base. The central bank
would buy/sell bonds in exchange for hard currency. When the central bank
disburses/collects this hard currency payment, it alters the amount of currency in the
economy, thus altering the monetary base.
Reserve requirements
The monetary authority exerts regulatory control over banks. Monetary policy can be
implemented by changing the proportion of total assets that banks must hold in
reserve with the central bank. Banks only maintain a small portion of their assets as
cash available for immediate withdrawal; the rest is invested in illiquid assets like
mortgages and loans. By changing the proportion of total assets to be held as liquid
cash, the Federal Reserve changes the availability of loanable funds. This acts as a
change in the money supply. Central banks typically do not change the reserve
requirements often because it creates very volatile changes in the money supply due
to the lending multiplier.
Discount window lending
Discount window lending is where the commercial banks, and other depository
institutions, are able to borrow reserves from the Central Bank at a discount rate. This
rate is usually set below short term market rates (T-bills). This enables the institutions
to vary credit conditions (i.e., the amount of money they have to loan out), there by
affecting the money supply. It is of note that the Discount Window is the only
instrument which the Central Banks do not have total control over. By affecting the
money supply, it is theorized, that monetary policy can establish ranges for inflation,
unemployment, interest rates ,and economic growth. A stable financial environment is
created in which savings and investment can occur, allowing for the growth of the
economy as a whole.
Interest rates
The contraction of the monetary supply can be achieved indirectly by increasing
the nominal interest rates. Monetary authorities in different nations have differing
levels of control of economy-wide interest rates. In the United States, the Federal
Reserve can set the discount rate, as well as achieve the desired Federal funds rate by
open market operations. This rate has significant effect on other market interest rates,
but there is no perfect relationship. In the United States open market operations are a
relatively small part of the total volume in the bond market. One cannot set
independent targets for both the monetary base and the interest rate because they are
both modified by a single tool — open market operations; one must choose which one
to control.
In other nations, the monetary authority may be able to mandate specific interest
rates on loans, savings accounts or other financial assets. By raising the interest rate(s)
under its control, a monetary authority can contract the money supply, because higher
interest rates encourage savings and discourage borrowing. Both of these effects
reduce the size of the money supply.
Currency board
A currency board is a monetary arrangement that pegs the monetary base of one
country to another, the anchor nation. As such, it essentially operates as a hard fixed
exchange rate, whereby local currency in circulation is backed by foreign currency
from the anchor nation at a fixed rate. Thus, to grow the local monetary base an
equivalent amount of foreign currency must be held in reserves with the currency
board. This limits the possibility for the local monetary authority to inflate or pursue
other objectives. The principal rationales behind a currency board are threefold:
1. To import monetary credibility of the anchor nation;
2. To maintain a fixed exchange rate with the anchor nation;
3. To establish credibility with the exchange rate (the currency board
arrangement is the hardest form of fixed exchange rates outside of
dollarization).
In theory, it is possible that a country may peg the local currency to more than
one foreign currency; although, in practice this has never happened (and it would be a
more complicated to run than a simple single-currency currency board). A gold
standard is a special case of a currency board where the value of the national currency
is linked to the value of gold instead of a foreign currency. The currency board in
question will no longer issue fiat money but instead will only issue a set number of
units of local currency for each unit of foreign currency it has in its vault. The surplus
on the balance of payments of that country is reflected by higher deposits local banks
hold at the central bank as well as (initially) higher deposits of the (net) exporting
firms at their local banks. The growth of the domestic money supply can now be
coupled to the additional deposits of the banks at the central bank that equals
additional hard foreign exchange reserves in the hands of the central bank. The virtue
of this system is that questions of currency stability no longer apply. The drawbacks
are that the country no longer has the ability to set monetary policy according to other
domestic considerations, and that the fixed exchange rate will, to a large extent, also
fix a country's terms of trade, irrespective of economic differences between it and its
trading partners.
Hong Kong operates a currency board, as does Bulgaria. Estonia established a
currency board pegged to the Deutschmark in 1992 after gaining independence, and
this policy is seen as a mainstay of that country's subsequent economic success (see
Economy of Estonia for a detailed description of the Estonian currency board).
Argentina abandoned its currency board in January 2002 after a severe recession. This
emphasized the fact that currency boards are not irrevocable, and hence may be
abandoned in the face of speculation by foreign exchange traders. Following the
signing of the Dayton Peace Agreement in 1995, Bosnia and Herzegovina established
a currency board pegged to the Deutschmark (since 2002 replaced by the Euro).
Currency boards have advantages for small, open economies that would find
independent monetary policy difficult to sustain. They can also form a credible
commitment to low inflation.
Unconventional monetary policy at the zero bound
Other forms of monetary policy, particularly used when interest rates are at or
near 0% and there are concerns about deflation or deflation is occurring, are referred
to as unconventional monetary policy. These include credit easing, quantitative
easing, and signaling. In credit easing, a central bank purchases private sector assets,
in order to improve liquidity and improve access to credit. Signaling can be used to
lower market expectations for future interest rates. For example, during the credit
crisis of 2008, the US Federal Reserve indicated rates would be low for an ―extended
period‖, and the Bank of Canada made a ―conditional commitment‖ to keep rates at
the lower bound of 25 basis points (0.25%) until the end of the second quarter of
2010.
ECONOMIC POLICY
Economic policy refers to the actions that governments take in the economic field. It
covers the systems for setting interest rates and government budget as well as the
labour market, national ownership, and many other areas of government interventions
into the economy. Such policies are often influenced by international institutions like
the International Monetary Fund or World Bank as well as political beliefs and the
consequent policies of parties.
Types of economic policy
Almost any aspect of government has an economic aspect and so many terms are
used. A few example of types of economic policy include:
Macroeconomic stabilization policy tries to keep the money supply growing,
but not so quick that it results in excessive inflation.
Trade policy refers to tariffs, trade agreements and the international
institutions that govern them.
Policies designed to create Economic growth
o Policies related to development economics,
Redistribution of income, property, or wealth
Regulation
Anti-trust
Industrial policy
Technology-based Economic Development Policy
Macroeconomic stabilization policy
Stabilization policy attempts to stimulate an economy out of recession or
constrain the money supply to prevent excessive inflation.
Fiscal policy, often tied to Keynesian economics, uses government spending
and taxes to guide the economy.
o Fiscal stance: The size of the deficit
o Tax policy: The taxes used to collect government income.
o Government spending on just about any area of government
Monetary policy controls the value of currency by lowering the supply of
money to control inflation and raising it to stimulate economic growth. It is
concerned with the amount of money in circulation and, consequently, interest
rates and inflation.
o Interest rates, if set by the Government
o Incomes policies and price controls that aim at imposing non-monetary
controls on inflation
o Reserve requirements which affect the money multiplier
Tools and goals
Policy is generally directed to achieve particular objectives, like targets for
inflation, unemployment, or economic growth. Sometimes other objectives, like
military spending or nationalization are important. These are referred to as the policy
goals: the outcomes which the economic policy aims to achieve.
To achieve these goals, governments use policy tools which are under the
control of the government. These generally include the interest rate and money
supply, tax and government spending, tariffs, exchange rates, labour market
regulations, and many other aspects of government.
Selecting tools and goals
Government and central banks are limited in the number of goals they can
achieve in the short term. For instance, there may be pressure on the government to
reduce inflation, reduce unemployment, and reduce interest rates while maintaining
currency stability. If all of these are selected as goals for the short term, then policy is
likely to be incoherent, because a normal consequence of reducing inflation and
maintaining currency stability is increasing unemployment and increasing interest
rates.
Demand-side vs. supply-side tools
This dilemma can in part be resolved by using microeconomic, supply-side
policy to help adjust markets. For instance, unemployment could potentially be
reduced by altering laws relating to trade unions or unemployment insurance, as well
as by macroeconomic (demand-side) factors like interest rates.
Discretionary policy vs policy rules
For much of the 20th century, governments adopted discretionary policies like
demand management designed to correct the business cycle. These typically used
fiscal and monetary policy to adjust inflation, output and unemployment.
However, following the stagflation of the 1970s, policymakers began to be attracted
to policy rules. A discretionary policy is supported because it allows policymakers to
respond quickly to events. However, discretionary policy can be subject to dynamic
inconsistency: a government may say it intends to raise interest rates indefinitely to
bring inflation under control, but then relax its stance later. This makes policy non-
credible and ultimately ineffective. A rule-based policy can be more credible, because
it is more transparent and easier to anticipate. Examples of rule-based policies are
fixed exchange rates, interest rate rules, the stability and growth pact and the Golden
Rule. Some policy rules can be imposed by external bodies, for instance the Exchange
Rate Mechanism for currency.
A compromise between strict discretionary and strict rule-based policy is to grant
discretionary power to an independent body. For instance, the Federal Reserve Bank,
European Central Bank, Bank of England and Reserve Bank of Australia all set
interest rates without government interference, but do not adopt rules.
Another type of non-discretionary policy is a set of policies which are imposed by an
international body. This can occur (for example) as a result of intervention by the
International Monetary Fund.
Economic policy through history
The first economic problem was how to gain the resources it needed to be able
to perform the functions of an early government: the military, roads and other projects
like building the Pyramids. Early governments generally relied on tax in kind and
forced labour for their economic resources. However, with the development of money
came the first policy choice. A government could raise money through taxing its
citizens. However, it could now also debase the coinage and so increase the money
supply. Early civilizations also made decisions about whether to permit and how to
tax trade. Some early civilizations, such as Ptolemaic Egypt adopted a closed currency
policy whereby foreign merchants had to exchange their coin for local money. This
effectively levied a very high tariff on foreign trade. By the early modern age, more
policy choices had been developed. There was considerable debate about
mercantilism and other restrictive trade practices like the Navigation Acts, as trade
policy became associated with both national wealth and with foreign and colonial
policy. Throughout the 19th Century, monetary standards became an important issue.
Gold and silver were in supply in different proportions. Which metal was adopted
influenced the wealth of different groups in society.
The first fiscal policy
With the accumulation of private capital in the Renaissance, states developed
methods of financing deficits without debasing their coin. The development of capital
markets meant that a government could borrow money to finance war or expansion
while causing less economic hardship. This was the beginning of modern fiscal
policy. The same markets made it easy for private entities to raise bonds or sell shares
to fund private initiatives.
Business cycles
The business cycle became a predominant issue in the 19th century, as it became
clear that industrial output, employment, and profit behaved in a cyclical manner. One
of the first proposed policy solutions to the problem came with the work of Keynes,
who proposed that fiscal policy could be used actively to ward off depressions,
recessions and slumps. The Austrian school argues that central banks create the
business cycle.
Summary and Conclusion
As countries move toward market-based policies, it is important for them to
have effective competition policy. The cornerstones of competition policy include a
statute, enforcement agency, and adjudicating body. Although there are basic
principles that are useful to follow when designing new competition policy, the
specific context of each economy should be taken into account when preparing a
policy. Simply copying an approach used elsewhere will not guarantee effectiveness.
Establishing this basic framework is the first step in implementing competition policy.
Once it is in place, adequate funding and appropriate enforcement choices are
essential to protect the competitive forces on which a market economy is based.
The lessons we have learned from helping some developing countries implement their
competition policies, as well as the antitrust laws and policies of the United States and
other mature market economies, are useful references for designing an effective
competition policy for China. The successful implementation of such a policy will
prove crucial to the success of China's ongoing market reform.
References
[1] Monetary Policy". Federal Reserve Board. January 3, 2006.
http://www.federalreserve.gov/policy.htm.
[2] B.M. Friedman, "Monetary Policy," Abstract.". International Encyclopedia of
the Social & Behavioral Sciences. 2001. pp. 9976–9984.
[3] Rogoff, Kenneth, 1985. "The Optimal Commitment to an Intermediate
Monetary Target", Quarterly Journal of Economics 100, pp. 1169–1189
[4] Forder, James (December 2004). ""Credibility" in Context: Do Central
Bankers and Economists Interpret the Term Differently?" (pdf). Econ Journals Watch.
http://www.econjournalwatch.org/pdf/ForderComment1December2004.pdf.
[5] "Bank of England founded 1694". BBC. March 31, 2006.
http://www.bbc.co.uk/history/timelines/britain/stu_eng_bank.shtml.
[6] "Federal Reserve Act". Federal Reserve Board. May 14, 2003.
http://www.federalreserve.gov/generalinfo/fract/.
[7] Friedman, Milton (1960). A Program for Monetary Stability. Fordham
University Press.
[8] Bernanke, Ben (2006). "Monetary Aggregates and Monetary Policy at the
Federal Reserve: A Historical Perspective". Federal Reserve.
http://www.federalreserve.gov/newsevents/speech/bernanke20061110a.htm.
[9] Nelson, Edward (2007). "Milton Friedman and U.S. Monetary History: 1961-
2006". Federal Reserve Bank of St. Louis Review (89 (3)): 171.
http://research.stlouisfed.org/publications/review/07/05/Nelson.pdf.
[10] "Blog: Favorite Friedman quotes" Friedman, Milton quotes, Wikiquote
http://bryanbrandenburg.blog.com/2032327/.
[11] "Exchange Rates". The Library of Economics and Liberty. March 31, 2006.
http://www.econlib.org/library/ENC/ExchangeRates.html.
[12] "The Case Against the Fed". June 5, 2009. http://mises.org/daily/3480.
[13] Orphanides, Athanasios. Taylor rules (Abstract). The New Palgrave
Dictionary of Economics, 2nd Edition. v. 8. pp. 200–04.
http://www.dictionaryofeconomics.com/article?id=pde2008_T000215&q=taylor%20r
ules&topicid=&result_number=1.
[14] Abdel-Monem, Tarik. "What is The Gold Standard?". University of Iowa
Center for The Center for International Finance and Development.
http://www.uiowa.edu/ifdebook/faq/faq_docs/gold_standard.shtml.
[15] Olivei, Giovanni P. (2002). "Switzerland’s Approach to Monetary Policy".
New England Economic Review (Federal Reserve Bank of Boston) (Second Quarter):
57–60. http://www.bos.frb.org/economic/neer/neer2002/neer202l.pdf.
[16] "Monetary Policy Framework". Bank Of England. 2006.
http://www.bankofengland.co.uk/monetarypolicy/framework.htm.
[17] "U.S. Monetary Policy: An Introduction". Federal Bank of San Francisco.
2004. http://www.frbsf.org/publications/federalreserve/monetary/.
Analysis and processing - introduction to knowledge management
Caracostea Ionut-Andrei, Titu Maiorescu University, Romania
Abstract: Although the essential theoretical knowledge of marketing concepts is not
enough for a person involved in the management and marketing planning. To be
competitive in the labor market in the area of marketing interest must possess specific
information analysis tools in order to capture those aspects of the marketing
environment necessary for development decision making. Using the analytical
capabilities resulting from technological boom of the last decades, especially those
pertaining to information technology is vital for the competitiveness of the marketing
activities of a modern organization.
Keywords: analysis, knowledge management, processing
In recent years there has been a global revolution in marketing information, a
revolution based on data warehouses, modeling and logistic support came from the
area tehnolgiei information. In the normal course of business specific to banks,
investment funds, direct marketing companies, and other organizations that generate
an enormous volume of data about their customers and their transactions, and a tool of
analysis is compentent method perfect way to transform it into a strategic asset for
your organization part. By training and experience, accumulated knowledge and skills
man. In the process of communication (inter-human, public, in writing or through the
media) to disseminate information (derived - derived from knowledge transmitter).
Receiver, assuming they interpret information (comprehension, analysis, storage, or
rejection), transforming them into their own knowledge. Accelerated evolution of
society in recent centuries due to continuous improvement of the media, implicitly
teaching methods (training) and ways to store accumulated knowledge. Pattern and
organization of modern libraries and archives, with catalogs and processes for
indexing, search and retrieval of information, computer and electronic databases
(support on disk), electronic library, and finally the World Wide Web, "the led to
what today we call the vision of Information Society and the so-called knowledge
society. Public access to the most recent results in all fields of knowledge,
simplification of inter-human communication (telephone, fax, e-mail), leading to
coagulation of work teams (quite common) without territorial restrictions, the
possibilities for cooperation difficult imagined in the past. And the results are visible
even in the pace of scientific and technical developments, the pace of accumulation of
new knowledge.
General information:
• Knowledge communicated or received, relating to facts or circumstances, the
news (in Romanian: information, but English is defective plural noun);
• Knowledge acquired through study, communication, research, training, etc,
Evidence (in Romanian: info);
• The act or activity information (in Romanian: Information);
• Office or office - public information service (in Romanian in the plural, as a
proper name ―Information‖);
• Information theory is a function attached to each message size as defined by
Shannon in the logarithm base 2;
• In computer science, that is input or output (the computer), or stage of
processing (memorizing information, information transmission);
• Information and knowledge (and shares information and knowledge) are
terms (relative equivalents - synonymous in some contexts and terms: data,
facts, or tips). Describe human acquisition through reading, study,
experiments. Information (information) relating to facts told, read, or
communicated, which may be non-organized and even unrelated. While the
body of knowledge is organized - the correlated information, or adequate
understanding of "assimilation";
• As a manifestation, in expressions like: information processing, information
retrieval, information theory or science.
Information is usually defined as the study of information processing, is now a term
synonymous with computer science. However, the computer remains a tool for the
computer, a tool is under study. Outstanding issues highlighted by one of the leading
computer scientists, Djikstra, who said the information is about as much to do with
computers as astronomy is the telescope.
As a particular item of information we use the term ―date‖, that names and
individual factors or statistics, specific information - private. Data processing is an
expression equivalent to processing. Instead, talk about data structures and, especially,
about the database. From sender to receiver, information travels in the form of
packaged messages. Along the lines of a letter, the header includes shipping and
destination addresses, time of issue, subject and, possibly, the urgency of the message,
encoding mode, etc.
Types of information
But to return to information, and try to classify the types that we encounter
around, or about which we hear people speaking. We attempt a classification by form,
content (background), or by how they perceive - Receive the information. Or by type
elements - symbols composing it: in talking about how the computer coding of the
message transmitting. (Digit - numeral system, letters and words - Formula or written
text, images - grimacing, musical sounds, smells - taste flavors, tactile elements -
nudges) ... We can analyze the complexity of information, classifying it as level of
development - the complex (raw data, unprocessed data analysis and reports are
processed and discussed works are being developed theories, predictions, or new
working methods, and artistic works or interpretations).
Finally, written information, we can talk about the device they are stored - held:
note - transcripts, manuscripts, printed documents (books, articles in magazines,
brochures, leaflets), electronic documents (on tapes, video cassettes, diskettes or
Compact discs - CDs, Web documents - available through the internet). And
especially to eventually occur and language, typing elements (presentation), the
utilization of graphics and imaging. The person receiving the information may mean
or not. That depends on the cultural and language knowledge (code) in which
information is transmitted. But the consistency of information. Returning to the
classification of information by content, by level of processing and the mode of
perception, we distinguish:
• Quantitative information (numerical) of measurements, costs, assessments = raw
information - data:
1. numeric (accounting, financial, experimental)
2. calendar
3. geodesic (geometric, trigonometric)
4. astronomical
5. demographic
6. statistics.
• Information (interpretation) = written documents (texts)
1. letters, press releases, news
2. reports (accounting, scientific, technical ,...)
3. scientific publications (articles, books)
4. textbooks, teaching texts role,
5. literature (novels, short stories, essays, poems)
6. legislative
7. Historical
• Audio-visual:
1. verbal communication, conference
2. music
3. sketches, drawings
4. images, animation, movies
• Psychics:
1. genetic
2. subconscious (dreams, nightmares, telepathic messages)
The studies that were done recently, commercials, and various educational
messages touch, formulated and packaged as information content in many forms,
writing text accompanying sounds, images, charts, and animations. It talks about
using multi-media resources for a stronger impact as the target group (recipients).
Consistency and reliability
Fairness and consistency of message received, as mentioned above, not only
elements but also depend on the status of formal address (the skills and knowledge).
The ability to decode, read and understand the message, to extract information from
him. This still does not mean assimilation of information, adding it to the set of
knowledge that the receiver already has. The message may be understandable even if
one includes information that is false or contradictory. To accept and assimilate
information, most times it need to convince us, to believe, to accept as true. So talking
about the reliability of information. Ability to challenge information, to analyze her
credibility depends on critical thinking rather than the receiver. In the absence of
critical spirit all information will be accepted and assimilated in part. What will
inevitably lead to contradictions and confusion. Effective organization and use the
knowledge base depends heavily on the existence and depth of critical thinking. Most
of the commercials have the appearance of reliable information (and based on the
credibility, to make us remember the product name and look for him, or at least buy it
when we see happening). Only critical thinking and experience in commercials, we
can help you not run soon to order - buy product. But the news, but statistical data on
different channels that you receive is credible it or not? An illustrious editor of a
European electronic publications, theorized that the news story, and he specialized
agencies, as publisher, do not care whether or not credible!
Conclusion
We are in a world awash in information, assailed by offers and ads on every channel,
radio, TV, phone, movies or on the street, and especially on the Internet. For some
instinct or because we avoid the critical spirit, the other must be systematized and
summarize them somehow. They fit the tables, make diagrams or draw graphs. Or
simply to "statistically" to better understand, track progress, basically to do with the
situation.
References:
[1] ASIS KM Website http://www.asis.org/SIG/sigkm/index.html
[2] Brint.com Knowledge Portal http://www.brint.com/ym.html
[3] Knowledge Management Research Center
http://www.cio.com/research/knowledge/
[4] Karl-Erik Sveiby and Knowledge Associates http://www.sveiby.com.au/
[5] University of Arizona http://www.cmi.arizona.edu/research/kno_mgmt/
Aspects of the design of distributed databases
Burlacu Irina-Andreea, Titu Maiorescu University, Romania
Abstract: Distributed data - data, processed by a system, can be distributed among
several computers, but it is accessible from any of them. A distributed database
design problem is presented that involves the development of a global model, a
fragmentation, and a data allocation. The student is given a conceptual entity-
relationship model for the database and a description of the transactions and a
generic network environment. A stepwise solution approach to this problem is shown,
based on mean value assumptions about workload and service. A management system
of a distributed database (SGBDD) is a software system that enables management
and distributing BDD transparent to the user. A SGBDD consists of a single database
which is decomposed into fragments, poassibly some fragments are multiplied, and
each fragment or copy kept on one or more sites under the control of a local DBMS.
Each site is capable of processing user queries in the local system, independently of
the rest of the network, or is able to participate in the processing of data in other sites
in the network. To say that a DBMS is distributed CLE should be less global demand.
Keywords: databases, DBMS, SGBDD, distributed databases, design
Introduction
Distributed database systems (SBDD) are two approaches to meeting the data
processing which may seem diametrically opposed: technology systems and the
database of computer networks. Database systems have evolved from data processing
in which each application to define and maintain their own data, to one in which the
data are defined and managed centrally. This new orientation leads to independent
data, such applications become immune to changes in physical or logical data
organization and vice versa. A major motivation in using database systems is the
integration of data and provide a centralized and controlled access to data. On the
other hand, the technology of computer networks promotes a thing that is against all
efforts of centralization. It can be so difficult to understand how these two contrasting
approaches can be summarized in a technology that is stronger and more promising
than both. The key to understanding is the realization that the most important
objective of database technology is not centralized, but integration. It is important to
note that none of these terms do not implicate the other. Perhaps no integration
without centralization, it is the very purpose of distributed databases.
Distributed Data Processing
Distributed Processing is one of the most abused terms in computer science in
recent years. It was used to refer to various systems such as multiprocessor systems,
distributed data processing and computer networks. Distributed processing is a
concept that is difficult to give a rigorous definition, so we give a definition in terms
of distributed database systems. A distributed computing system consists
a number of autonomous processing elements (not necessarily homogeneous) that are
interconnected by a network of computers and cooperate in performing tasks (task)
them. By "processing element" means a computer that can run their own programs.
In this context, the question: What is distributed? Processing logic is something to be
distributed. The definition of a computer system given above implies that the logic
processing or processing elements are distributed. Another may be the distribution
functions. The various functions of a computer system can be performed by different
parts of hardware or software. Another may be that according to data distribution. The
data used by a number of applications can be distributed to multiple processing nodes.
Finally, and control can be distributed. Control execution of different tasks can be
distributed instead of being executed by a single computer. From the point of view of
distributed databases, these methods of distribution are necessary and important.
Another question that can be asked is: Why distribute? Classical answers to this
question said that better reflects the distributed processing of large enterprise
organizational structure today, and that such a system is safer and better. From a
global perspective, however, can be said that the main reason for distributed
processing is large and complicated problems we face today, using variations of the
well known rules divide et impera. If the required software distributed processing can
be created, then it is possible to solve these complicated problems simply by sharing
their smaller parts that can be solved by different software groups, located on different
computers, producing a system that runs on more many processing elements, but can
effectively perform a common task.
What is a distributed database system?
We define a distributed database as a collection of logically interrelated
databases distributed over a computer network. A distributed database management is
defined as a software system that enables management of distributed databases and
makes the distribution transparent to users. There are two important terms in this
definition: logically related in a distributed computer network. Distributed database is
a virtual character. Its components are stored on separate databases, located on
separate nodes of a network. Each node is a database system, with its own database,
its users and the local DBMS. Distributed system can be viewed as a partnership
between the local DBMS and a new component in each node. It provides the
functions necessary for pairing. A distributed database system (SBDD) is not only "a
collection of files" that can be stored individually on each node of a network of
computers.
Figure 1.1 Environment SBDD
Advantages and disadvantages of distributed database
Advantages:
Local autonomy. Users of the database is on a certain station in the network have
local control of data, due to the decentralized organization. Local data is kept locally,
where they belong logically in most cases is in executing their processing node are
Site 2
Site 3
Site 4
Site 5
Network
communication
stored. Performance Improvement. The parallel execution of multiple tasks in
different stations, it can reduce data access conflicts and can improve both speed of
execution of operations on the database and speed access to stored information.
Improving safety and availability. If the data is replicated on multiple nodes, the
unavailability of one of them or a network problem is not that the data can not be
accessed. Economic. If you are geographically dispersed databases and applications
that are running in place and data, improves communication costs.
Expandability. In a distributed environment is much easier to increase the database
size. Partajabilitate. Organizations that have geographically distributed operations and
data stores normally in the same manne.
Disavantages:
Complexity. Problems in the SBDD are more complex than centralized ones,
including problems they shared, and the still unresolved in the centralized
environment. The problem is the complexity of the programmer and not the user.
Cost: Distributed systems require additional hardware and software, which increases
costs.
Distribution control. This point, which is also an advantage, cause problems of timing
and coordination.
Security. It is well known difficulty in maintaining adequate control of network
security, so in distributed databases.
Adoption of technology difficult. Many companies have invested heavily in their
database systems that are not distributed. Currently there are no tools or technologies
that help users to convert the centralized databases distributed databases.
Distributed database design
Designing a distributed computing system involves taking decisions on the placement
of data and programs in a computer network nodes, and network design itself. In the
case of distributed databases, assuming that the network has been designed already
and there is a copy of the DBMS software on each node in the network where data are
stored, it remains to focus our attention on the distribution of data.
Alternativ design strategia
There are two major strategies for the design of distributed databases:
top down design and bottom-up design. As the name indicates, these strategies are
very different approaches to the design process. But most applications are not so
simple that it fits completely in one of these strategies, so it is important to know that
these strategies should be used together as a complement to each other.
Top down design
The work begins with the analysis of requirements that define the system
environment. The document is the entrance requirements for two parallel activities:
conceptual design and design views. Visual design activity defines interfaces for end
users. Conceptual design is the process by which the system is examined to determine
its component types of entities and relationships between them. Conceptual design
can be interpreted as the integration of user views. This is very important because the
conceptual model must not only support existing application , but also future onest
Global Conceptual Schema and information about access patterns collected as a result
of design views are distributed design step inputs. The objective is now to design
conceptual schemes through local distribution entities across nodes of the distributed
system. In a relational model, entities corresponding relationships. Rather than
distributing their relations division subrelatii is used, called fragments, and they are
distributed. So distributed design activity consists of two steps: fragmentation and
allocation. The last step in the design process is the physical design, which makes
connections between conceptual schemes and local physical storage devices on the
nodes corresponding data. Entries in this process are the local conceptual schemes and
patterns of access to information.
Figure 1.2 Top-Down design process
Bottom-Up Design
Top-down approach is suitable when we are designing a BDD starting from
scratch. But it often happens that some databases already exist, and design activities
must realize and integration. Bottom-up approach is suitable for such environments.
The starting point in designing bottom-up is local conceptual schema. The process
consists in the integration of local schemes in the global conceptual schema.
Transparency SGBDD. SGBDD Transparency refers to the separation of high-level
semantics of an implementation system at a low level. In other words, hide the
implementation details transparent to users. Advantages of DBMS transparent sites
are portability, reconfigurabilitatea, providing a development environment for
complex applications.
Requirements analysis
System
Requirements
Design Conceptual To design User
imput to integration
Conceptual Scheme Globala
Access information Define external s
cheme
distributed
design
Local conceptual
scheme
physical design
physical schema
observation and monitoring
Intrare utilizator
Feedback Feedback
Data Independence
Independence of data is a fundamental form of SGBDD transparency. It refers
to the immunity of applications to change user in defining and organizing data, and
vice versa. You can highlight the two types of independent data:
Logical data independence refers to the immunity of user applications from changes
in the structure of the database logic. If an application works with a subset of
attributes of a relationship, it will not hurt to add a new attribute to the same
relationship. Physical data independence refers to hiding details of storage structure
for user applications. The application does not need to be modified whenever there are
changes in the organization of data.
Network Transparency
The media management of distributed databases is an asset that must be
managed: the network. Preferably, a user will be protected by the network's
operational details. If possible, the existing network should be hidden. Then there will
be no difference (in terms of the user) between applications using centralized
databases and those that use distributed databases. This type of transparency is called
network transparency. Transparency in replication. It is necessary that the data is
distributed by a replicative manner between machines on a network. So the same data
will be found on many cars. This improves system performance since different and
competing demands of users can be more easily satisfied. For example, data are often
accessed by a user can store his car, and that of other users with similar access
requirements. If a network node is unavailable, data can be accessed from other
locations. What data should be replicated in many children depends largely on the
applications that access them. Data replication but causes some problems updating.
The fact that the user does not know how many copies were made and does not know
anything about their existence, we can call the transparent replication (replication
Transparency). Transparency to fragmentation. It is intended that each database
object to be divided into small fragments and each fragment to be treated as a separate
object database. This is caused by reasons of performance, availability and reliability.
Also, fragmentation can reduce the negative effects of replication.
Figure 1.3: Levels of transparency
Conclusion
Internal management of distributed databases is demanding and generally difficult,
because we have ensured that:
• Distribution is transparent (invisible and unobtrusive) - users must be able to
interact with the system as if they were a non-distributed (monolithic)
• Transactions must also have a transparent structure (invisible and
unobtrusive).
Course each transaction must maintain database integrity, despite the multiplicity of
partitions. For this they are usually divided subtranzacţii, each of them working with
only one partition.
References
[1] Elmasri and Navathe, Fundamentals of database systems (3rd edition),
Addison-Wesley Longman, ISBN 0-201-54263-3
[2] M. T. Ozsu and P. Valduriez, Principles of Distributed Databases (2nd
edition), Prentice-Hall, ISBN 0-13-659707-6
[3] O'Brien, J. & Marakas, G.M.(2008) Management Information Systems (pp.
185-189). New York, NY: McGraw-Hill Irwin
[4] O'Brien, J. & Marakas, G.M.(2008) Management Information Systems (pp.
185-189). New York, NY: McGraw-Hill Irwin.
Information Technology Management
Patru Catalin, Titu Maiorescu University, Romania
Petrache Alina, Titu Maiorescu University, Romania
Abstract: Most of the Information technology management programs are designed to
educate and develop managers who can effectively manage the planning, design,
selection, implementation, use, and administration of emerging and converging
information and communications technologies. The IT Manager and the Project
Manager are not at odds. The Project Manager’s ability to focus knowledge, skills,
tools and techniques on the temporary endeavor frees the IT Manager to focus on
keeping the wheels of commerce turning. The IT Manager supports the project by
providing staff resources and by lending authority to the Project Manager.
Keywords: management, IT, project, technology
The definition of Information Technology Management, derived from the
definition of Technology Management is as follows: Information Technology
Management is concerned with exploring and understanding Information
Technology as a corporate resource that determines both the strategic and operational
capabilities of the firm in designing and developing products and services for
maximum customer satisfaction, corporate productivity, profitability and
competitiveness. IT Management is a different subject from Management
Information Systems. Management Information Systems refer to information
management methods tied to the automation or support of human decision making. IT
Management, as stated in the above definition, refers to the IT related management
activities in organizations. MIS as it is referred to is focused mainly on the business
aspect with a strong input into the technology phase of the business/organization.
The concept of Information Technology Management includes considering the value
creation that is created through technology. It is heavily dependent upon the
alignment of technology and business strategies. While the value creation for an
organization is a network of relationships between internal and external environments,
technology plays an important role in improving the overall value chain of an
organization. However, this increase requires business and technology management to
work as a creative, synergistic, and collaborative team instead of a purely mechanistic
span of control according to Bird. In the U.S. students have the opportunity in order
to gain more formal education in several universities and others educational
institutions, including Bachelor's, Master's and PhD degrees.
Those practicing Information Technology Management are commonly referred
to as IT Managers. IT Managers have a lot in common with Project Managers but
their main difference is one of focus: IT Managers are responsible and accountable for
an ongoing program of IT services while the Project Managers' responsibility and
accountability are both limited to a project with a clear start and end date.
IT Manager’s Role
Most of the Information technology management programs are designed to
educate and develop managers who can effectively manage the planning, design,
selection, implementation, use, and administration of emerging and converging
information and communications technologies. The program curriculum provides
students with the technical knowledge and management knowledge and skills needed
to effectively integrate people, information and communication technologies, and
business processes in support of organizational strategic goals.
1. Graduates will explain the important terminology, facts, concepts, principles,
analytic techniques, and theories used in the field of information technology
management.
2. Graduates will be able to effectively apply important terminology, facts,
concepts, principles, analytic techniques, and theories in the field of information
technology management when analyzing complex factual situations.
3. Graduates will be able to effectively integrate (or synthesize) important facts,
concepts, principles, and theories in the field of information technology management
when developing solutions to information technology management multifaceted
problems in complex factual situations.
IT Managers and Project Management
The IT Manager, or any functional manager, and the Project Manager have a lot in
common. Both work to achieve organizational goals by directing the activities of
people. They employ many of the same knowledge sets, skills, abilities and personal
traits to plan, organize, staff, direct and control their teams, including:
Strong leadership and interpersonal skills
Ability to manage people, time and resources
Ability to develop people
Excellent communication and presentation skills
Good organizational and problem solving abilities
Good negotiation, conflict resolution and decision making skills
Talent to handle clients
Knowledge/awareness of the requirements of the relevant legislation and
regulations
Honesty and integrity
Although most managers have similar skills sets, there are some differences
between the roles of IT Managers and Project Managers. The main difference is one
of focus. The IT Manager is responsible for an ongoing program of IT services, while
the Project Manager’s accountability and authority last only for the life of the project.
In fact, it is the time-limited nature of projects that makes the role of Project Manager
so important.
Despite such similarities and differences, it is important for the IT Manager to know
the basics of formalized project management. Why? Because every organization
needs to be able to implement change, and almost all important changes are defined or
implemented through project teams. Does everyone in the organization (or in IT) need
to know project management, or is it safe to leave it in the hands of a highly trained
few? Spread the knowledge around!
Project teams are frequently cross-functional with members from many parts of the
organization. Project teams must be able to interact successfully with people
throughout the organization in order to plan and complete the project. Everyone in the
organization will be affected by what the project teams do, so the more members of
the organization understand about project management, the better they will be able to
support, guide, and interact with the project team.
While many organizations have trained Project Managers or a Project
Management Offices, IT Managers without these resources can still benefit from
project management frameworks that describe best practices such as the Project
Management Institute’s PMBOK® (Project Management Book of Knowledge) and
the United Kingdom government’s PRINCE2 (PRojects IN Controlled
Environments). It is not necessary or possible for everyone in an organization to be
project management professionals. But that doesn’t mean that they should be ignorant
of the essentials of project management. The important thing for the entire
organization is to select an approach to managing projects and socialize it in the
organization.
Let’s talk a little more about projects themselves. We’ve said that change is
reason for projects. Changes in the business are naturally reflected, or anticipated, in
the technology supporting the business. We agree on where they come from, but what
is a project? A project is a one-time, multitask job with clearly defined starting and
ending dates, a specific scope of work to be performed, a budget, and a specified goal
or outcome to be achieved. You can easily understand that the amount of time, energy
and focus required to get a project done would place an unacceptable burden on any
IT manager if added to current responsibilities. Enter the project team.
When the need for a change is identified, the search is on for a Project Manager.
Someone is needed to focus on the initiation, planning, executing, monitoring and
controlling, and closing the work of the project. However, the Project Manger does
not perform the activities that make up the project; this is the purpose of the project
team. The IT Manager supports the project by providing staff resources and by
lending authority to the Project Manager. Unlike IT Managers who have positional
authority, Project Managers derive their authority from the project charter. This can
lead to confusion among team members when normal workload and project activities
conflict. The IT Manager can facilitate project success by adjusting workloads and
priorities to free up project team members.
The PMBOK defines Project Management as ―the application of knowledge,
skills, tools and techniques to project activities to meet project requirements.‖ Simply
stated, it is a process-oriented approach to defining, doing and measuring the work
required to get the desired outcome. It is in the familiarity and facility with the tools
and techniques of formal project management that the Project Manager diverges from
other managers in the organization. The professional Project Manager has devoted
significant time and effort to learning and applying the best practices appropriately,
and the ability to match the framework to the organizational style and culture is the
result of both training and experience.
What every IT Manager needs to know about Project Management is that
there are best practices which when socialized into an organization can greatly
enhance the success of projects. Project Management is a serious, professional field of
interest with its own practices and attainments. Adopting Project Management will
make the work of effectively managing change in the IT environment easier and more
consistent. It is important to remember that any framework or tool is only as good as
the people who use it. Picking a framework and tools that suit your organizational
culture, familiarizing the entire organization with the chosen framework, and training
staff in the use of and reasons for the tools can make the handling of changes more
consistent, efficient and successful. The IT Manager and the Project Manager are not
at odds. The Project Manager’s ability to focus knowledge, skills, tools and
techniques on the temporary endeavor frees the IT Manager to focus on keeping the
wheels of commerce turning.
References:
[1] Bird, M. (2010). Modern Management Guide to Information Technology.
Create Space. http://harvardbookstore.biz
[2] CIO Wisdom: Best Practise from Silicon Valley's Leading IT Experts, Lane,
D. (ed), Prentice Hall 2004
[3] M.K. Badawy (1998), Technology Management Education: Alternative
Models. California Management Review. 40 (4), pp. 94–115
[4] McKeen, James D., and Smith, Heather A., Making IT Happen: Critical
Issues in IT Management, Wiley Series in Information Systems, 2003
[5] O’Brien, J (1999). Management Information Systems – Managing Information
Technology in the Internetworked Enterprise. Boston: Irwin McGraw-
Hill. ISBN 0071123733.
[6] Thomas, Rhané (June 15, 2009). "IT Managers and Project Management". PM
Hut. Retrieved December 13, 2009.
The marketing entrepreneurship and the SMEs competitiveness
Sterpu Cristina, Titu Maiorescu University, Romania
Abstract: The marketing - entrepreneurship interface at corporate level has
generated many debates and studies in the last two decades, both in marketing and
entrepreneurship fields. Certain elements of marketing orientation and approach may
be used in the development of entrepreneurial processes, while entrepreneurial
orientation and behaviour enhance the marketing performance of a company which
operates in a dynamic environment. This paper presents the concept of
entrepreneurial marketing, a proposed entrepreneurial marketing model, as well as
the partial result of a preliminary test of this model.
Keywords: entrepreneurship, entrepreneurial market orientation, marketing,
organisational learning, SMEs.
The concept of entrepreneurial marketing
Entrepreneurship has been defined as the process of creating value by bringing
together a unique set of resources, an opportunity to exploatrii. The process includes
the set of activities to identify opportunities, business definition, evaluation and
acquiring the necessary resources, management and getting results. Entrepreneurship
is the main mediator of change. The events leading to the elimination of economic
equilibrium entrepreneurial phenomenon Schumpeter termed "creative destruction"
(Schumpeter, 1971). In addition, entrepreneurship is seen as an organizational
orientation, which emphasizes the three dimensions:innovation, taking calculated
risksand proactive orientation. Innovations is refers to the generation of creative
solutions to problems facing the company and new customers' latent needs. Taking
calculated risk involves the willingness to devote significant resources to projects that
shows a probability of failure considered to be reasonable, but at the same time,
ensure risk diversification.
There is growing evidence to support the idea that, over time, companies that
have been most successful are those engaged in entrepreneurial activities of character.
The need for an entrepreneurial approach is high in situations where firms are faced
with these situations: rapid changes in the technology, needs consumer and social
values, decision-making situations in which reaction time is reduced, reduced
possibility of long-term control of environmental variables. Businesses operate in an
environment characterized by a high risk and low possibilities of anticipating changes,
the new competitive characterized by four categories of factors: a change,complexity,
chaos and contradiction.
Marketing Entrepreneurship is approached as an integrative concept marketing
approach to adapt to new environmental conditions in which the enterprise operates.
Marketing of entrepreneurial marketing and entrepreneurship synthesize a
comprehensive concept, in which marketing is a process the company can make the
mindset. The first interface research in marketing / entrepreneurship started in
University of Chicago in 1982 and in 1997 the first symposium was held American
Marketing Association on "Marketing and Entrepreneurship."
Interface marketing - entrepreneurship is needed in two situations:
market characteristics are discontinuous, entrepreneurial orientation represents
a useful support in identifying needs yet uncollected;
market with features continue, entreprise guiding marketing strategy in the
direction of the current needs in an environment that presents new features.
Marketing and entrepreneurship presents three areas of interface (Collinson and Shaw
2001): orientation to change; identifying and exploiting opportunities; orientation
towards innovation.
Fig.1 Marketing Entrepreneurship Interface
A proposed model of entrepreneurial marketing
Entrepreneurial marketing model that we propose is a development from the
perspective of organizational learning theory, the model of Morris, Schindehutte and
LaForge (2002), based on the following assumptions:
a) environmental conditions determine the need and extent of manifestation of the
spirit entrepreneurial marketing processes;
b) entrepreneurship event marketing processes is conditioned by three factors:
entrepreneurial orientation towards the enterprise market; organizational climate and
communication system based on ICT, in particular ERP (Enterprise Resource
Planning) collaborative;
c) entrepreneurship event marketing processes induces a higher level of
performance marketing.
In substantiation construct "entrepreneurial orientation towards the market" I started
to critically examine the concept "market orientation" (Kohli and Jaworski 1990,
Narver and Slater 1990) and "entrepreneurial orientation" (Covina and Slevin 1989).
From the perspective of the positivist theory the discovery of entrepreneurial
opportunities (Schumpeter 1971) and social constructivist theory (Kirzner 1997),
orientation Entrepreneurial to the market was conceptualized based on three
dimensions: innovativeness in exploring (recognition / construction) business
opportunities, pro-entrepreneurial opportunities in experimenting, networking
(network integration partners) in order to exploit business opportunities.
One of the major challenges in adopting ERP systems is to ensure flexibility,
organizations must constantly integrate new modules useful in conducting business
Orientation to
change
Identifying and
capitalizing
MARKETING
Opportunities
ENTREPRENEURSHIP
Innovation
orientation
processes in the shortest time (Gupta 2000). Flexibility refers to the extension of ERP
systems by which an ERP system can be dynamically reconfigured to define new
business models and processes (Stedman 1999). We recommend that the
implementation of the proposed model of marketing entrepreneurship to be held in
four major stages as follows:
1. development and learning of a value system in the entrepreneurial top
management;
2. developing a vision and an entrepreneurial organizational missions;
3. development of an entrepreneurial type of organizational climate, which
includes:
development of an entrepreneurial style of leadership;
modifying the structure to become an entrepreneurial type;
developing an entrepreneurial culture;
develop a system of evaluation, reward and control Type
entrepreneurship.
4. development of an entrepreneurial type of organizational învtare which include:
a system of knowledge generation and storage;
a system to disseminate knowledge within the organization;
entrepreneurial skills development system;
a communication / collaboration through networks intra and inter-
organizational knowledge.
SMEs competitiveness and influence factors
Romanian Government was fully committed to strengthening the
competitiveness of Romanian companies in accessing the Internal Market perspective
in accordance with the European Charter for Small Enterprises adopted at Lisbon in
2000. Lisbon Charter was designed to help improve the competitiveness of European
SMEs in the context of globalization and knowledge-based economy.
Moreover, in 2002 Romania has signed with other candidate countries, at the
time, Maribor Declaration which commits to harmonize policies to support domestic
firms competitive with the Charter of Lisbon. As expression of these international
commitments assumed by Romania, directions and measures that define the national
strategy for supporting and promoting SMEs for 2004-2008 reflect internal needs of
the horizon of small businesses, but also respond to European concerns. National
Agency for Small and Medium Enterprises and Cooperatives (operatives), as a
governmental body is responsible for implementing the Government Strategy for
SME support and development approved by GD. 1280/2004, for which aims to
substantiate its decisions and proposals for SME support policy analysis, including
qualitative, stage of development, needs and priorities of SMEs and cooperatives.
Given these considerations, investigative tool used, that the questionnaire and analyze
the results closely follow the action steps and direction of national strategy.
These priority B SME strategy aims at increasing competitiveness. The main factors
which influence the light was reviewing the competitiveness of SMEs are:
(A) the ability to invest;
(B) the ability to create and bring new products to market, noting that during the
acceptance of new product research is not limited to single product or product
trademark, but the question any further targeted improvement of product renewal
process;
(C) ability to compete both domestically (with a focus on participation in public
procurement) as well as international markets.
In the following we present briefly the results and findings on the issues listed above.
Mention that users of this research report may go to more detailed analysis and
consultation and analysis and more detailed, depending on the needs of specific
analysis, the full survey data presented in the attached tables.
Introducing new products
Innovation capacity of SMEs is one of the special characteristics of this sector
with focus on flexibility and market needs. The success of innovative activities
undertaken by SMEs is materialized, both in developing markets by introducing new
or improved products, and through improvement and innovation in organizational
processes and technologies of each company, including distribution processes. From
this perspective, the investigation stops only to analyze the capacity of SMEs to create
sites and introduce new products on the market. In this approach, the new product is
treated with a single product, no new product is not restricted to the trademark. The
new product, the acceptance of the methodology, it is understood in the context of this
research, a product so completely new and substantially improved products. Analysis
highlighting categories are widening the sources of new products.
SME capacity to introduce new products
Only one third of SMEs have succeeded in introducing new products to market in
2004. While the other two thirds that 68.2% of SMEs have introduced new products.
SMEs active in the industry recorded the highest percentage of new products
introduced in Chapter market in 2004, 37.3% respectively. SMEs in this industry are
followed by those in the trade with a share of 35.1%. All records in other sectors as
different as the average total weight (30.3%). Mostly, these differences are explained
by specific sectors in the sense that they are sectors such as construction or transport
where innovation of new products is slower. In contrast in the services sector, an area
suitable for innovation, new services introduced weight is below average overall.
Based on the foregoing, it can highlight the reduced capacity to innovate and create
new services to SMEs active in this field. This is worrying, more so as the cost of
creating new services are generally lower than the costs involved in innovation and
creation in industry, for example, or in communications. It still took into account that
telecommunication infrastructure is underdeveloped in some cases what is not
allowed to support performance of firms. The reduced capacity of SMEs to introduce
new products on the market and keep the block size analysis. Regardless of size, most
SMEs reported that they have brought new products on the market in 2004. Their
percentage varies from 69.4% to small enterprises, to just 61.5% for the middle
category of enterprise.
Origin of new products introduced to the market
Although only a third of SMEs have succeeded in the market introduction of
new products, though those who have done so have used almost equally from three
sources: imported products (45.5%) and product creation other companies in Romania
(46.0%). In last place was created by the company's own products (40.8%).
There were significant differences between SMEs according to sector. 89.9% of
SMEs in the industry have reported putting new products on the market claim that
these products are their own creation. Trading firms have introduced new products in
almost equal measure, both imports (66.0%), and products developed by other
companies in Romania (68.8%). The weights given illustrates the fact that most SMEs
in the trade use both sources of new products. Following the share of SMEs which
have made imported products compared to those who have introduced new products
created by other companies in Romania, one can observe a certain direction in some
sectors (construction, industry and other services) to more than than to import
products from other companies in the country. This shows that innovation in these
sectors is still poor as well as assimilating new technologies that allow businesses to
respond to market demands.
In contrast, undoubtedly, the ability of SMEs to introduce new products on the
market as a result of their own creation, increases with the size category. Micro-
enterprises are proving to be the least capable of innovation in new products, only
37.2% have created these products, while small in percentage of 63.5% and medium-
sized ones at a rate of 74 3% said that new products were brought to market its own
creation. Orientation bias of new products imported from those created by other
companies in the country is preserved and largest category of analysis.
Conclusion The potential for innovation, business process integration, climate collaborative
creative, entrepreneurial spirit and the manifestation of the propensity of ERP
implementation are factors that provide the conditions necessary for developing
processes entrepreneurial marketing and increase business performance. The
methodology of implementing a model of entrepreneurial marketing management
guidance, structure schimbaii Make behavior of all members of an organization
involved in the processes of entrepreneurial nature. This work does not detail the
relationship between behavior type entrepreneurship and the firm's marketing
performance. Three major research directions required in the future: analysis of
relationships between entrepreneurial orientation of the company and its performance,
identify the factors mediating environmental influences on the relationship between
entrepreneurial orientation and marketing performance, identifying the role of
organizational learning processes in the development of entrepreneurial behavior in
marketing.
References: [1] Ambler, T., Kokinakki, F. (1997). Measures of Marketing Success, Journal of
Marketing Management, 13, p. 665-678
[2] Bruner, G., James, K.E., Hensel, P.J. (2001), Marketing Scales Handbook: A
Compilation of Multi-Item Measures, Vol. III. Butterworth Heinemann
[3] Burns, P. (2004). Corporate Entrepreneurship: Building an Entrepreneurial
Organization, Macmillan.
[4] Clark, H. Bruce (1999). Marketing Performance Measures: History and
Relationships, Journal of Marketing Management, 1999, 15
[5] Collinson, E., Shaw, E. (2001). Entrepreneurial marketing – a historical
perspective on development and practice, Management Decision, Vol. 39(9), 761-767
[6] Covin, J.G., Slevin, D.P. Strategic management of small firms in hostile and
benign environments, Strategic Management Journal,1989, 10, pp.75-87
[7] Damanpour, F. (2001). The dynamics of the adoption of product and process
innovations inorganizations, Journal of Management study: 38:1, 45-65
[8] Deshpande, R. (1999). Foreseeing marketing, Journal of Marketing 63(3), 164-
167
[9] Doyle, P. (1995). Marketing in the new millennium,European Journal of
Marketing, 29 (12), 23-41
[10] Druy, D. H., Farhoomand, A. (1999). Innovation difusion and
implementation, International Journal of Innovation Management, 3:2, 133-57
[11] Kohli, A.K., Jaworski, B.J. (1990). Market orientation: the construct,
research proportions and managerial implications, Journal of Marketing,54, 1-18
[12] Palmer, A. (1994). Relationships marketing: back to basics?, Journal of
Marketing Management,pp. 571-57
[13] Pohlman, R., Gardiner, G. (2000). Value Driven Management: How to
Create and Maximize Value over Time for Organizational Success, New York:
AMACOM
[14] Robinson, A. G., Stern,S. (1997). Corporate Creativity. How Innovation and
Improvement actually happen, San Francisco: Berret-Koehler Publishers
[15] Schumpeter, J.A. (1971). The fundamental phenomenon of economic
development, in Kilbey (Ed.), Entrepreneurship and economic development, New
York:Free-Press, pp.43-70 Sheth, J.N., Sisodia, R.S. (1999). Revisiting marketing’s
lawlike generalizations, Journal of the Academy of Marketing Sciences, 17 (1), 71-
87
Banking system in Romania and implementation
of electronic payment
Nita Georgian, Titu Maiorescu University, Romania
Abstract: Romania's banking system is a two-tier system, including the National
Bank and credit institutions. This system was introduced in December 1990, the first
step of the banking reform. The legislative framework governing the banking system
comprises: Law on National Bank of Romania - Law no. 312 of 28 June 2004
Ordinance on credit institutions and capital adequacy - Government Emergency
Ordinance no. 99 of 6 December 2006; Law for the approval of Government
Emergency Ordinance no. 99 of 6 December 2006 - Law no. 227 of 4 July 2007. On
the Romanian market also operates non-bank financial institutions such as mutual
assistance funds, pawnshops, financial leasing companies, credit companies for
individuals, micro-finance companies, mortgage companies, companies offering
factoring operations, finance companies specializing in commercial transactions, and
others.
Keywords: banking system, electronic payment
National Bank of Romania (NBR), established in 1880, the central bank.
Independent public corporation with headquarters in Bucharest, Romania's National
Bank is the only institution authorized to issue currency in the form of banknotes and
coins as legal tender in Romania. According to Law no. 312/2004 on the Statute of
the NBR, the NBR's main tasks are: development and implementation of monetary
policy and exchange rate policy; licensing, regulation and prudential supervision of
credit institutions, promote and oversee the smooth operation of payment systems for
ensuring financial stability; issue banknotes and coins as legal tender in Romania;
Exchange arrangements and supervise its observance; Romania's international reserve
management. Deposit Guarantee Fund in the banking system was established in 1996, the
Government Ordinance no. 39/1996, being constituted as a legal entity of public law.
The main objective of the Fund is a money back guarantee deposits in credit
institutions by individuals, legal persons or entities without legal personality, under
the conditions and limits set by the Law on the Fund and as special administrator
activity, or as interim manager liquidator of the credit institutions, if his appointment
in one of these qualities. Since the establishment of the Deposit Guarantee Fund in the
banking system, representatives of the Romanian Association of Banks have played
an active role in the development and implementation of regulations on deposit
guarantee and the mechanism of the payout to depositors in the event of
bankruptcy banks. ARB is represented by the President and Secretary General of the
Board of Trustees of the Fund guarantee deposits in the banking system.
Credit Bureau
Founded on the initiative of the banking community in Romania, Credit Bureau is
a joint stock company, which has 24 banks as founding members. Currently, the credit
bureau has 27 banks as shareholders. Became operational in August 2004, Credit
Bureau currently manages positive and negative data, from banking and non-bank
sources. The purpose of the Credit Bureau was to provide truthful information to
participants in the banking system, updated and consistent units for individuals who
have taken loans from banks or financial companies, have bought a lease to have been
insured against risk of default by an insurance company.
The activity of the credit bureau include: Collection / data processing portfolio of
clients - individuals of participants; Participants provided information and analysis to
identify and quantify credit risk, increased credit quality, reduce risk of fraud and
protection of creditors; Establish uniform criteria for assessing the customer (scoring);
Banking and financial consultants.
TransFond
As a result of special efforts made both by the central bank and the banking
community for a structural reform of payment and settlement systems in Romania,
Romania currently has a modern payment system, the existing European Union.
Electronic Payment System Operator in Romania is TransFonD - Society Funds
Transfer and Settlement, a private company founded by the banking community in
Romania, with shareholders National Bank of Romania (33.33%) and 25 commercial
banks (66.67% ). Main activity of TransFonD is to provide clearing and settlement
services to non-cash payments in local currency, for institutions, National Bank,
Treasury and other financial institutions. The main tasks of TransFond are:
administration and operation of SENT (automated clearing house); technical
management and operation ReGIS (gross settlement system in real time), as mandated
by the National Bank of Romania; technical operation of the system SAFIR (the
storage and settlement of securities transactions); Providing support for participants in
the three systems.
Romanian Banking Institute is mainly focused on professional development,
training and specialization of banking staff in accordance with the requirements of
credit institutions and the National Bank of Romania, in cooperation with the
Romanian Association of Banks and programs approved by the Board of Directors.
Relationship and collaboration with the Romanian Association of Banks of the
Romanian Banking Institute is performed by the position ARB founding member and
member of the Board. In recent years, cooperation with the Romanian Banking
Institute has increased by direct contact with specialists of the institute permanent
representatives of the specialized committees of the Romanian Association of Banks,
which will debate the current issues on each segment of banking activity, and
resulting in need to organize courses, seminars, workshops have been organized by
the Romanian Banking Institute Banking system employees.
Payment Incident Bureau
Established in 1997 the National Bank, Central Payment Incident is a
mediation center that manages information specific incidents of payment instruments
(checks, bills, promissory notes), both in terms of banking (in the drawing
discovered account), and from a social perspective (lost / stolen / damaged).
Incident Information to the Central Payments are made electronically, using the
Interbank Communication Network linking all central banks' central bank with power.
Established in 2000 under the National Bank of Romania, CCR is a specialized
structure in the collection, storage and centralize information on the exposure of credit
institutions in the Romanian banking system to those borrowers who received loans
and / or commitments whose rate cumulatively exceed the reporting threshold or
delays in payments, as well as information on card frauds produced by the owners.
Users of the information in the database CIB are reporting entities - credit institutions
and mortgage companies - National Bank of Romania. Credit risk information
exchange is done electronically through the Interbank Communication Network.
ROMCARD
ROMCARD is a limited company, founded in 1994 by the five largest banks in
Romania, with the object of processing credit card transactions. ROMCARD provide
services on bank card transactions, including field work authorization card
transactions, database administration, national and international switching, settlement
and card transaction processing, security solution for accepting and issuing banks for
e-commerce. ROMCARD processing system is carried out and certified by
international standards. Streamlining and simplification of reporting credit institutions
by the National Bank of Romania Project to streamline and simplify the reporting
system, developed by the National Bank of Romania and the Romanian Banks
Association, started in late 2004 with objectives, milestones, activities and
organizational framework of the project. Project coordination is provided by the
National Bank of Romania.
The primary objective of this project is to ensure optimum data and
information necessary for performing his duties by the central bank. Objectives are
derived a set of basic indicators that each credit institution will have to report to the
National Bank of Romania and making a database of basic indicators, as the sole
source for obtaining aggregated indicators underlying rationale and
implementation policies.Infrastructure project will be the computer system for
reporting to the National Bank of Romania. Data and information submitted by
reporting entities will be structured as primary indicators, which will be determined in
a unique way of reporting entities, as required by National Bank of Romania. Primary
indicator is a basic concept, process or phenomenon associated with a financial -
banking. Each indicator is associated with metadata to describe the existing system,
eliminating redundancy, data validation and addition of new indicators. Primary
indicators will be transmitted electronically to the Central Bank, using a single
reporting channel. Based on the primary indicators transmitted by reporting entities
will be calculated - the central bank - aggregate indicators. Existing system will
eliminate redundancies in the current reporting system and will mean achieving a
centralized database, support for decision making performance.Credit institutions will
have access to their primary indicators and aggregate information as the banking
system. Flexible system allows adding new message types to meet new reporting
requirements and the modification of existing messages, depending on changes in
current reporting requirements. The introduction of new indicators or modify existing
ones will be made but only with opinion mixed methodology, after a preliminary
analysis of requirements, to avoid redundancies and duplication.
Stage of project is as follows:
In the analysis phase, completed in September 2005, were established optimal
information requirements of departments reporting the central bank manages as object
of activity in conjunction with current and future requirements in the regulations -
application of International Financial Reporting Standards (IFRS) new Basel II
Capital Accord, the European Union integration. These requirements have been
integrated - at the primary indicators - the principle of uniqueness indicator.
A key activity during the analysis phase was to evaluate the current system of
reporting and indicators, in terms of information requirements and proposals optimal
credit institutions, eliminating outdated indicators and the reporting and introducing
redundancy and - where appropriate - new indicators.
He developed an important activity reports documenting the knowledge systems
implemented in the central banks of France, Belgium, Netherlands, Spain, Italy and
Germany. Have been reviewed and revised legal acts issued by the National Bank of
Romania in accordance with relevant Community rules and requirements for credit
institutions. Completion of the analysis phase has resulted in the development of
reports list, the list of indicators, reporting schedules and records indicators.
The design phase has been developed a logical model of the database structure from
the primary and secondary indicators, process models based on process requirements
set out in the analysis phase, was designed computer system architecture and were
developed applications. It was developed in conjunction with approved credit and
Norma NBR on the transmission through the primary indicators Reporting System on
National Bank of Romania. For complete information on project status and
continuous exchange of views with experts credit institutions have been held since
March this year a series of seminars on architecture of the new reporting system, the
implications and challenges of the new reporting system and simulation of reports -
practical exercise. Starting September, pilot tests were conducted with a limited
number of banks, followed by all banks in the system tests.
Fig. 1. Electronic Payment System Developments
Implementing Electronic Payment System, a project that lasted two and a half years,
was completed in 2005 and involved the efforts of the banking community in
Romania, Romanian National Bank, Treasury, Funds Transfer Society and
Settlement- TransFonD, as operator of the funds transfer system in Romania.
Starting from the second quarter of 2005 came into operation Electronic Payment
System components: large-value payment system ReGIS SENT automated clearing
house system and sapphire securities registration and settlement issued by the
Ministry of Finance. Entry into service of new electronic payment system has led to
better risk management and liquidity, increase business effectiveness and efficiency
of payments and the security level of interbank transactions. Payment infrastructure in
Romania has been steadily replaced almost entirely, as follows: In April 2005, came
into operation ReGIS for large-value payments, the processing and settlement on a
gross basis in real time, owned and operated by the National Bank of
Romania. ReGIS processed safely and with minimal risk of settlement of high value
or urgent payments, which represent over 90 percent of all funds handled by payment
and settlement systems in Romania. In May 2005, entered into service SENT,
automated clearing house, which took over the processing of all interbank payment
orders. The system, owned and operated by TransFonD automatically processes retail
payments. They remained just outside the debit instruments, that checks, drafts and
promissory notes. As an authorized agent of the National Bank of Romania,
TransFonD done through the 42 branches, manual clearing of payment instruments
and settlement of paper flow in the net positions ReGIS; the third component of the
system - the system for processing securities transactions, SAFIR - went into
operation in October 2005. SAFIR, the registration system and settlement of
transactions in securities issued by the Ministry of Finance and managed by the
central bank as its agent, is owned and operated by the National Bank of
Romania. Number and value of transactions processed by the system are still low, but
the system is significant in that it provides support to the other two systems of
interbank payments, the collateral management for settlement.
It should be noted that the implementation of Electronic Payment System created the
possibility of integrated processing of payments from the originator to the beneficiary
and thus generated a process of reforming the payment systems of credit institutions
by automating the processing of payments and termination of agreements between a
technical of participants. Some developments of the system are considered by the
banking community, as follows:
Automation SENT processing of debit instruments - checks, bills, promissory
notes, Using SWIFTNet network and system services SENT Implementing a new
help-desk applications, Automation in certificates of deposit issued by National Bank
of Romania, SaFIR, Depository, settlement and processing operations in government
securities in the benchmark SaFIR, Secondary market by creating an electronic
trading platform, Collateral management, The indirect holdings, cross-border
connections Project on automating the processing of debt instruments - checks, bills,
promissory notes - the system's objectives SENT total elimination of paper flow by
using digital image interchange, clearing and settlement through the automated
electronic messages.
The solution initially proposed as a definitive solution PHARE project involves
immobilization and dematerialization of debit instrument to drive the bank where the
beneficiary is first presented for collection. Dematerialization is the capture and
transfer all information contained on the physical instrument, with its scan in a
standardized electronic message that is sent to the beneficiary bank and then to drive
SENT payer's bank for checking and clearing. Electronic message processing is done
on a similar procedure to that used direct debit instructions SENT. E-mail, secured
electronic signature has the same legal value as the physical instrument. The solution
provides automated processing, integrated processing creates the possibility of such
tools and provide a reduced processing time. To be applied to such a solution is
necessary to amend the legislative framework on checks, bills of exchange and
promissory notes, which requires the presentation of the physical instrument for
payment. Given the current restrictions of the legal framework, a solution was
proposed in two stages. The first is the movement of paper debt instruments at central
level in parallel with electronic messages, accompanied optional scan physical
support. Thus email has probative value with the physical instrument, with payment to
be made based solely on his presentation. In stage two, after changing the legal
framework would be implemented final solution for digital image exchange
processing of debt instruments.
Processing solution to debt instruments instead of digital images (Source:
TransFonD)
After numerous meetings and debates in the banking community, the Romanian
Association of Banks has made a proposal in two stages:
In a first stage, immediately applicable, to centralize the physical exchange
TransFonD debt instruments and settlement shall be made SENT using direct debit
interchange mechanism and XML message formats adapted for each payment
instrument in hand. This solution was approved by the National Bank, which drafted a
regulation, analyzed within the banking community.
In the second stage, based on studies to be conducted by a joint team composed of
experts from the Romanian Banking Association, the National Bank of Romania and
TransFonD could decide on legal amendments and that the investments required
forprocessing circuit and debt instruments to make a modernized and efficient
manner, or possibly even the solution to the total or partial use of the check payments
between companies, the model applied by countries in the region (eg Poland).
Another project high-interest credit institutions since the start of the new system
is the use of SWIFTNet services network and transfer files SENT. SWIFTNet Bulk
Payments solution, which will exchange the files representing the low-value payments
through the SWIFTNet network using FileAct services, provides a secure platform for
the exchange of payments representing lots of files in any format. Current users of the
solution are clearing houses, banks and corporations correspondent.
Adopting this solution enables reuse investment in SWIFTNet infrastructure for
sharing files and retail payments can mean a substantial reduction in cost per message
for credit generated by the increasing volume of messages sent via SWIFTNet, as well
as operating costs and infrastructure maintenance. SWIFTNet enables connection to
all potential players involved: corporations, banks, clearing houses, standardize
transaction end-to-end integrated processing and increasing.
Conclusions
Evolution of the banking system, taken together, can not be detached from the
general situation of national economy, its fluctuations, both at micro and macro.
Thus, specific transformations of the transition period, inflationary economic
environment, banking legislation and the nature of managerial problems recorded at
certain banking companies have contributed to maintaining a low level of financial
intermediation, mainly due to the following phenomena:
Maintaining a high level of risks in lending, due to the economic environment and
low inflation since the economic agents to adapt to the demands of the market
economy, which led to incomplete commitment by banks to increase the
resources economic.
Saving-the intensification of Romanian economy, together with its inability to absorb
resources, not as respected equality between savings and investments, the rule of
development.
Failure-recovery in the savings credit and availability of selected banks, the
intermediary role of which is partially materialized Domestic and international money
market developments in the last period of time characterized by high volatility of
interest rates and exchange rates, coupled with increasing competition, reducing the
volume of assets and profit margins, due to credit institutions in the Romanian sector
of the realization stimulated a prudent management of banking assets and liabilities in
order to reduce variability in net interest income with major impact on the financial
performance of the bank. Maintaining solvency is one of the fundamental objectives
of bank performance diagnosis, because the smooth functioning of banking
institutions, and lack of liquidity or the inability of buying it equates failure of a bank.
For bankers, bank liquidity is breathing.
Lack of liquidity can significantly affect the current activity, resulting in
significant financial costs and image. If the bank has an adequate level of own funds
to finance a significant proportion of bank assets, meeting the liquidity is not a
difficult problem because an adequate level of own funds generated large profits are
made by those banks be of sufficient quality to generate credits that certainly due to
incoming flows. Position and reputation of banks in the banking system profitability
measured by past and future influence on bank liabilities and assets management.
Bank profitability can be appreciated only by static analysis, conducted with the
financial statements of the bank's financial performance, but by analyzing the maturity
profile of assets and liabilities, the latter highlighting the mismatch due to sudden
change of the bank's balance sheet structure . Evolution of the banking system can not
be detached from the general situation of national economy, its fluctuations both
macroeconomic and microeconomic level. Electronic Payment System aligns the
Romanian banking sector to European standards in terms of settlement payments, the
main benefit is the significant reduction in the duration of settlement, but only for
financial institutions that have a modern information infrastructure, proven practices,
in some banks in Romania, where the computer system is not developed enough, the
introduction of electronic payment system led to a slowdown even settlements.
In recent years, Romania's banking sector engagement exhibit increasingly higher
lending activity, with an explosion of funding for population. Banking companies
increasingly diversify its portfolio and enter the population segments and categories
of firms less concerned. In this respect, 2005 and 2006 were dominated by
transactions in the retail market, services market where banks have diversified greatly,
leading to lower costs.
References:
[1] Basno Cezar, Nicolae Dardac, „Moneda, credit, banci”, Editura Didactica si
Pedagogica, Bucuresti
[2] Nanu Roxana Maria, „Reforma sistemului bancar din România‖, Editura
Universitara, Craiova
[3] Nicolae Danila, „Privatizarea bancilor‖, Editura Economica, Bucuresti
[4] www.transfond.ro
[5] www.romcard.ro
Business intelligence
Cebotarean Elena, Titu Maiorescu University, Romania
Abstract: Business intelligence (BI) refers to computer-based techniques used in
spotting, digging-out, and analyzing business data, such as sales revenue by products
and/or departments, or by associated costs and incomes. BI technologies provide
historical, current, and predictive views of business operations. Common functions of
business intelligence technologies are reporting, online analytical processing,
analytics, data mining, business performance management, benchmarking, text
mining, and predictive analytics. Business intelligence aims to support better business
decision-making. Thus a BI system can be called a decision support system (DSS).
Though the term business intelligence is sometimes used as a synonym for competitive
intelligence, because they both support decision making, BI uses technologies,
processes, and applications to analyze mostly internal, structured data and business
processes while competitive intelligence gathers, analyzes and disseminates
information with a topical focus on company competitors. Business intelligence
understood broadly can include the subset of competitive intelligence.
Keywords: business intelligence, data, support system
In a 1958 article, IBM researcher Hans Peter Luhn used the term business
intelligence. He defined intelligence as: "the ability to apprehend the
interrelationships of presented facts in such a way as to guide action towards a desired
goal." Business intelligence as it is understood today is said to have evolved from the
decision support systems which began in the 1960s and developed throughout the
mid-80s. DSS originated in the computer-aided models created to assist with decision
making and planning. From DSS, data warehouses, Executive Information Systems,
OLAP and business intelligence came into focus beginning in the late 80s.
In 1989 Howard Dresner (later a Gartner Group analyst) proposed "business
intelligence" as an umbrella term to describe "concepts and methods to improve
business decision making by using fact-based support systems." It was not until the
late 1990s that this usage was widespread.
Business intelligence and data warehousing
Often BI applications use data gathered from a data warehouse or a data mart.
However, not all data warehouses are used for business intelligence, nor do all
business intelligence applications require a data warehouse. In order to distinguish
between concepts of business intelligence and data warehouses, Forrester Research
often defines business intelligence in one of two ways: Typically, Forrester uses the
following broad definition: "Business Intelligence is a set of methodologies,
processes, architectures, and technologies that transform raw data into meaningful and
useful information used to enable more effective strategic, tactical, and operational
insights and decision-making." When using this definition, business intelligence also
includes technologies such as data integration, data quality, data warehousing, master
data management, text and content analytics, and many others that the market
sometimes lumps into the Information Management segment. Therefore, Forrester
refers to data preparation and data usage as two separate, but closely linked segments
of the business intelligence architectural stack. Forrester defines the latter, narrower
business intelligence market as "referring to just the top layers of the BI architectural
stack such as reporting, analytics and dashboards."
Business intelligence and business analytics
Thomas Davenport has argued that business intelligence should be divided into
querying, reporting, OLAP, an "alerts" tool, and business analytics. In this definition,
business analytics is the subset of BI based on statistics, prediction, and optimization.
Applications in an enterprise. Business Intelligence can be applied to the following
business purposes (MARCKM), in order to drive business value.
1. Measurement – program that creates a hierarchy of Performance metrics (see
also Metrics Reference Model) and Benchmarking that informs business
leaders about progress towards business goals (AKA Business process
management).
2. Analytics – program that builds quantitative processes for a business to arrive
at optimal decisions and to perform Business Knowledge Discovery.
Frequently involves: data mining, statistical analysis, Predictive analytics,
Predictive modeling, Business process modeling
3. Reporting/Enterprise Reporting – program that builds infrastructure for
Strategic Reporting to serve the Strategic management of a business, NOT
Operational Reporting. Frequently involves: Data visualization, Executive
information system, OLAP
4. Collaboration/Collaboration platform – program that gets different areas (both
inside and outside the business) to work together through Data sharing and
Electronic Data Interchange.
5. Knowledge Management – program to make the company data driven through
strategies and practices to identify, create, represent, distribute, and enable
adoption of insights and experiences that are true business knowledge.
Knowledge Management leads to Learning Management and Regulatory
compliance/Compliance
Business Intelligence – Requirements Gathering
According to Kimball business users and their requirements impact nearly every
decision made throughout the design and implementation of a DW/BI system. The
business requirements sit at the center of the business core, and are related to all
aspects of the daily business processes. They are therefore extremely critical to
successful data warehousing. Business requirements analysis occurs at two distinct
levels:
Macro level: understand the business’s needs and priorities relative to a
program perspective
Micro level: understand the users’ needs and desires in the context of a single,
relatively narrowly defined project.
Approach
There are two basic interactive techniques for gathering requirements:
1. Conduct interviews.
You need to talk to the users about their jobs, their objectives, and their
challenges. This is either done with individuals or small groups
1. Facilitated sessions
Can be used to encourage creative brainstorming
Methods to avoid: Non-interactive alternatives such as sending out surveys and
questionnaires is not an effective requirements gathering technique!
Preparation
Identify the interview team
Lead interviewer – directing the questioning
Scribe – take copious notes during the interview
A tape recorder may be used to supplement the scribe, since it is useful as a
backup
Observers – optional part of the team. A good possibility for other team
members to gain knowledge about interviewing techniques. It is advisable that
there is no more than two observers present.
Research the organization
Reports, review of business operations, part of the annual report to gain insight
regarding organizational structure. If applicable, a copy of the resulting
documentation from the latest internal business/ IT strategy and planning meeting.
Select the interviewees
Select a cross section of representatives. Study the organization to get a good
idea of all the stakeholders in the project. These include:
Business interviewees (to understand the key business processes)
IT and Compliance/Security Interviewees (to assess preliminary feasibility of
the underlying operational source systems to support the requirements
emerging from the business side of the house.
Develop the interview questionnaires
Multiple questionnaires should be developed because the questioning will vary
by job function and level.
The questionnaires for the data audit sessions will differ from business
requirements questionnaires
Be structured. This will help the interview flow and help organize your
thoughts before the interview.
Schedule and sequence the interviews
Scheduling and rescheduling takes time, so make sure you prepare these a good
time in advance! Sequence your interviews by beginning with the business driver,
followed by the business sponsor. This is to understand the playing field from their
perspective. The optimal sequence would be:
Business driver
Business sponsor
An interviewee from the middle of the organizational hierarchy
Bottom of the organizational hierarchy
The bottom is a disastrous place to begin because you have no idea where you are
headed. The top is great for overall vision, but you need the business background,
confidence, and credibility to converse at those levels. Also if you are not adequately
prepared with in-depth business familiarity, the safest route is to begin in the middle
of the organization.
Prepare the interviewees
Make sure the interviewees are appropriately briefed and prepared to participate.
As a minimum, a letter should be emailed to all interview participants to inform them
about the process and the importance of their participation and contribution. The letter
should explain that the goal is to understand their job responsibilities and business
objectives, which then translate into the information and analyses required to get their
job done. In addition they should be asked to bring copies of frequently used reports
or spreadsheet analyses.
The letter should be signed by a high ranking sponsor, someone well-respected by
the interviewees. It is advisable not to attach a list of the fifty questions you might ask
in hopes that the interviewees will come prepared with answers. The odds are that
they won’t take the time to prepare responses, and even get intimidated by the volume
of your questions. Issues with requirements gathering and interviews The process of
conducting an interview may seem exhaustive at first, but the ground rule is to be well
prepared in all steps. Techniques for questioning may be a good idea to investigate
before conducting the interview. Ask open-ended questions such as why, how, what-
if, and what-then questions. Make sure you ask unbiased questions. Wrongfully asked
questions can lead to wrong answers and in worst case; wrong requirements are
gathered. The whole process is valuable in time and resources, and the wrong data can
slow down the development of the whole BI installation. Be sure that everyone in the
interviewee team is aware of their role to support that everything goes as planned. The
next part is to synthesize around the business processes
Prioritization of business intelligence projects
It is often difficult to provide a positive business case for Business Intelligence
(BI) initiatives and often the projects will need to be prioritized through strategic
initiatives. Here are some hints to increase the benefits for a BI project.
As described by Kimball you must determine the tangible benefits such as
eliminated cost of producing legacy reports.
Enforce access to data for the entire organization. In this way even a small
benefit, such as a few minutes saved, will make a difference when it is
multiplied by the number of employees in the entire organization.
As described by Ross, Weil & Roberson for Enterprise Architecture, consider
letting the BI project be driven by other business initiatives with excellent
business cases. To support this approach, the organization must have
Enterprise Architects, which will be able to detect suitable business projects.
Success factors of implementation
Before implementing a BI solution, it is worth taking different factors into
consideration before proceeding. According to Kimball et al. These are the three
critical areas that you need to assess within your organization before getting ready to
do a BI project:
1. The level of commitment and sponsorship of the project from senior
management
2. The level of business need for creating a BI implementation
3. The amount and quality of business data available.
Business Sponsorship
The commitment and sponsorship of senior management is according to
Kimball et al. The most important criteria for assessment. This is because that having
strong management backing can be able to shortcomings elsewhere in the project. But
as Kimball et al state: ―even the most elegantly designed DW/BI system cannot
overcome a lack of business [management] sponsorship‖. It is very important that the
management personnel that participate in the project have a vision and an idea of the
benefits and drawbacks of implementing a BI system. The best business sponsor
should have organizational clout and should be well connected within the
organization. It is ideal that the business sponsor is demanding but also able to be
realistic and supportive if the implementation runs into delays or drawbacks. The
management sponsor also needs to be able to assume accountability and to take
responsibility for failures and setbacks on the project. It is imperative that there is
support from multiple members of management so the project will not fail if one
person leaves the steering group. However, having many managers that work together
on the project can also mean that the there are several different interests that attempt
to pull the project in different directions. For instance if different departments want to
put more emphasis on their usage of the implementation. This issue can be countered
by an early and specific analysis of the different business areas that will benefit the
most from the implementation. All stakeholders in project should participate in this
analysis in order for them to feel ownership of the project and to find common ground
between them. Another management problem that should be encountered before start
of implementation is if the Business sponsor is overly aggressive. If the management
individual gets carried away by the possibilities of using BI and starts wanting the
DW or BI implementation to include several different sets of data that were not
included in the original planning phase. However, since extra implementations of
extra data will most likely add many months to the original plan. It is probably a good
idea to make sure that the person from management is aware of his actions.
Implementation should be driven by clear business needs.
Because of the close relationsship with senior management, another critical thing that
needs to be assesesed before the project is implemented is whether or not there
actually is a business need and whether there is a clear business benefit by doing the
implementation. The needs and benefits of the implementation are sometimes driven
by competition and the need to gain an advantage in the market. Another reason for a
business-driven approach to implementation of BI is the acquisition of other
organizations that enlarge the original organization it can sometimes be beneficial to
implement DW or BI in order to create more oversight.
The amount and quality of the available data.
This ought to be the most important factor, since without good data – it does not
really matter how good your management sponsorship or your business-driven
motivation is. If you do not have the data, or the data does not have sufficient quality
any BI implementation will fail. Before implementation it is a very good idea to do
data profiling, this analysis will be able to describe the ―content, consistency and
structure [..]‖of the data. This should be done as early as possible in the process and if
the analysis shows that your data is lacking; it is a good idea to put the project on the
shelf temporarily while the IT department figures out how to do proper data
collection. Other scholars have added more factors to the list than these three. In his
thesis ―Critical Success Factors of BI Implementation‖ Naveen Vodapalli does
research on different factors that can impact the final BI product. He lists 7 crucial
success factors for the implementation of a BI project, they are as follows:
1. Business-driven methodology and project management
2. Clear vision and planning
3. Committed management support & sponsorship
4. Data management and quality
5. Mapping solutions to user requirements
6. Performance considerations of the BI system
7. Robust and expandable framework
The user aspect of Business Intelligence
Some considerations must be made in order to successfully integrate the usage of
business intelligence systems in a company. Ultimately the BI system must be
accepted and utilized by the users in order for it to add value to the organization. If the
of the system is poor, the users may become frustrated and spend a considerable
amount of time figuring out how to use the system or may not be able to really use the
system. If the system does not add value to the users´ mission, they will simply not
use it. In order to increase the user acceptance of a BI system, it may be advisable to
consult the business users at an early stage of the DW/BI lifecycle such as for
example at the requirements gathering phase. This can provide an insight into the
business process and what the users need from the BI system. There are several
methods for gathering this information such as e.g. questionnaires and interview
sessions. When gathering the requirements from the business users, the local IT
department should also be consulted in order to determine to which degree it is
possible to fulfill the business´s needs based on the available data.
Taking on a user-centered approach throughout the design and development
stage may further increase the chance of rapid user adoption of the BI system.
Besides focusing on the user experience offered by the BI applications, it may also
possible to motivate the users to utilize the system by adding an element of
competition. Kimball suggests implementing a function on the Business Intelligence
portal website where reports on system usage can be found. By doing so, managers
can see how well their departments are doing and compare themselves to others and
this may spur them to encourage their staff to utilize the BI system even more.
In a 2007 article, H. J. Watson gives an example of how the competitive
element can act as an incentive. Watson describes how a large call centre has
implemented performance dashboards for all the call agents and that monthly
incentive bonuses have been tied up to the performance metrics. Furthermore the
agents can see how their own performance compares to the other team members. The
implementation of this type of performance measurement and competition
significantly improved the performance of the agents. Other elements which may
increase the success of BI can be by involving senior management in order to make
BI a part of the organizational culture and also by providing the users with the
necessary tools, training and support. By offering user training, more people may
actually use the BI application. Providing user support is necessary in order to
maintain the BI system and assist users who run into problems. User support can be
incorporated in many ways, for example by creating a website. The website should
contain great content and tools for finding the necessary information. Furthermore,
helpdesk support can be used. The helpdesk can be manned by e.g. power users or the
DW/BI project team.
Marketplace
There are a number of business intelligence vendors, often categorized into the
remaining independent "pure-play" vendors and the consolidated "megavendors"
which have entered the market through a recent trend of acquisitions in the BI
industry. Some companies adopting BI software decide to pick and choose from
different product offerings (best-of-breed) rather than purchase one comprehensive
integrated solution (full-service).
Independent BI market surveys and analyses include:
Gartner's "Magic Quadrant for Business Intelligence"
Business Application Research Center (BARC)'s "The BI Survey" and "The
BI Verdict" (formerly "The OLAP Report")
Forrester Research study
Industry specific
Specific considerations for business intelligence systems have to be taken in
some sectors such as governmental banking regulations. The information collected by
banking institutions and analyzed with BI software must be protected from some
groups or individuals, while being fully available to other groups or individuals.
Therefore BI solutions must be sensitive to those needs and be flexible enough to
adapt to new regulations and changes to existing laws.
BI and Semi-structured (or unstructured) data.
Businesses creates a huge amount of valuable information in the form of e.g. e-
mails, memos, notes from call-centers, news, user groups, chats, reports, web-pages,
presentations, image-files, video-files, marketing material and news etc.. However,
organizations often only use these documents once. According to Merril Lynch, more
than 85 percent of all business information exists as the before-mentioned information
types. These information types is called either semi-structured or unstructured data.
The management of semi-structured data is recognized as a major unsolved problem
in the information technology industry . According to projections from Gartner
(2003), white collar workers will spend anywhere from 30 to 40 percent of their time
searching, finding and assessing unstructured data. BI uses both structured and
unstructured data, but where the latter is easy to search, the former contains a large
quantity of the information needed for analysis and decision making . Because of the
difficulty of searching, finding and assessing unstructured/semi-structured data
properly, organizations don’t draw on these vast reservoirs of information, which
could influence a particular decision, task or project. This ultimately leads to
uninformed decision making .
Therefore, when designing a Business Intelligence/DW-solution, the specific
problems associated with semi-structured/unstructured data, must be accommodated
for, as well as those for the structured data .
Unstructured data vs. Semi-structured data
Unstructured/Semi-structured data has different meanings, depending on the
context it is viewed in. In the context of relational database systems, it refers to data
that can’t be stored in columns and rows. It must be stored in a BLOB (binary large
object), a catch-all data type available in most relational database management
systems. But many of these data types, like e-mails, word processing text files, ppt’s,
image-files, and video-files, conform to a standard that offers the possibility of meta
data. Meta data can include information such as author and time of creation, and this
can be stored in a relational database. Therefore it may be more accurate to talk about
this as semi-structured documents or data, but no specific consensus seems to be
agreed upon.
The problems with semi-structured/unstructured data and BI
There are several problems/challenges when trying to develop BI with semi-
structured data, and according to (Inmon & Nesavich, 2008) some of those are:
1. Physically accessing unstructured textual data – unstructured data is stored in
a huge variety of formats.
2. Terminology – Among researchers and analysts, there is a need to develop a
standardized terminology.
3. Volume of data – As stated earlier, up to 85% of all data exists as semi-
structured data. Couple that with the need for word-to-word and semantic
analysis..
4. Searchability of unstructured textual data – A simple search on some data, e.g.
apple, results in links where there is a reference to that precise search term.
(Inmon & Nesavich, 2008) gives an example: ―a search is made on the term
felony. In a simple search, the term felony is used, and everywhere there is a
reference to felony, a hit to an unstructured document is made. But a simple
search is crude. It does not find references to crime, arson, murder,
embezzlement, vehicular homicide, and such, even though these crimes are
types of felonies.‖
The use of Metadata
To solve the problem with the searchability and assessment of the data, it is
necessary to know something about the content. This can be done by adding context
through the use of metadata. A lot of system already captures some metadata, e.g.
filename, author, size etc. But much more useful could be metadata about the actual
content – e.g. summaries, topics, people or companies mentioned. Two technologies
designed for generating metadata about content is automatic categorization and
information extraction.
Conclusions
A 2009 Gartner paper predicted these developments in the business intelligence
market:
Because of lack of information, processes, and tools, through 2012, more than
35 percent of the top 5,000 global companies will regularly fail to make
insightful decisions about significant changes in their business and markets.
By 2012, business units will control at least 40 percent of the total budget for
business intelligence.
By 2010, 20 percent of organizations will have an industry-specific analytic
application delivered via software as a service (SaaS) as a standard component
of their business intelligence portfolio.
In 2009, collaborative decision making emerged as a new product category
that combines social software with business intelligence platform capabilities.
By 2012, one-third of analytic applications applied to business processes will
be delivered through coarse-grained application mashups.
A 2009 Information Management special report predicted the top BI trends:
"green computing, social networking, data visualization, mobile, predictive analytics,
composite applications, cloud computing and multitouch."
According to a study by the Aberdeen Group, there has been increasing interest
in Software-as-a-Service (SaaS) business intelligence over the past years, with twice
as many organizations using this deployment approach as one year ago – 15% in 2009
compared to 7% in 2008.
An article by InfoWorld’s Chris Kanaracus points out similar growth data from
research firm IDC, which predicts the SaaS BI market will grow 22 percent each year
through 2013 thanks to increased product sophistication, strained IT budgets, and
other factors.
References:
[1] http://en.wikipedia.org/wiki/Business_intelligence
[2] http://www2.sas.com/proceedings/forum2007/207-2007.pdf
Unemployment in Romania during the crisis
Şfichi Cristina-Monica, Titu Maiorescu University, Romania
Abstract: Unemployment in Romania during the crisis has increased significantly
from 7.2% in March 2008 to 10.1% in March 2010. To cover the debt caused by the
economic crisis in Romania, the Government has fired over 100,000 employees, but
also in the private sector have been fired over 150,000 workers. To combat
unemployment there are 3 methods, but in many cases, these measures do have the
effect of increasing the number and intensity of labor market barriers, increasing
unemployment.
Keywords: technical unemployment, economic crisis, the active population, GDP
Unemployment is the term used if no paid occupation (job) for forces capable and
qualified to work properly. This phenomenon is characterized by the fact that a
majority of citizens in search of a job. When this proportion has serious economic
problems in the region or State, by raising social spending for maintenance of the
unemployed.
Measures to combat:
1. Unemployment caused by the economic situation, when demand is reduced
economic market can be a flexible fiscal policy to offset the losses caused by reduced
sales.
2. A measure to combat structural unemployment is the establishment of
flexible wage rates through better cooperation between unions and management firm
that rates be adjusted to the level of inflation rate. Method extension school students
and employees early retirement proved a longer period of time that a costly measure
and ineffective. Another measure to reduce unemployment was to create services that
are shorter than 8 hours for a post to be occupied by two employees.
3. Active policy measures to reduce unemployment are:
o to new employees is a time trial, during which they receive a lower
salary, working time flexibility, ease -- of termination and flexible
wage rates as the economic situation
o an unemployed training and how to look for a job
o an integration process of those who live in the country and a foreign
nationality
o a higher level of skill and training to schools.
In many cases, active measures have the effect of increasing the number and
intensity of labor market barriers, increasing unemployment.
Unemployment in Romania during the crisis:
1. The state workers were the most affected by the crisis, the Government made a
budgetary restructuring of over 100.000:
a. Staff in education: in the years of crisis was taking reduced salaries by
25%, but were eventually fired more than 16.000 teachers. "This
measure we believe it to be unfair given that the Minister has promised
it will not be restructuring in education even if the economic crisis. We
can not dispense with service people in our schools, maintenance
workers and unqualified teachers nor the students can not remain
without education. Because where qualified teachers do not go, do not
agree to accept positions at distances the schools reamain without
teachers. My indications that the union representative was in the sense
that where people can retire, and even to retire early than to remain
without a job, and teachers who were to cancel the extended work,
"said Maria Ţiprigan, Pre-University Education union leader.
b. Medical personnel: over 2.000 medical staff was restructured in
Romania during the crisis. "It should be unlocked items in the system
because we have great need of teachers, doctors, nurses, nurses. We
have reorganized the program because the workload is greater. Many
employees are working overtime. If we will not know how teachers
will retire may ensure all shifts. Maybe by the end of the year will
unlock the jobs. We have made several statements, but did not do
anything until now, "said Dr. Elijah Manole.
c. Public Officials: More than 82.000 civil servants have been
restructured because Romania can be fit in agreement with the IMF.
"We hope the Government will make a budget amendment sometime
in September, so we do not get in the situation he could not pay on our
operation," said Ciumacenco.
d. Dignitaries: more than 2.000 officials have been recruited. ―It is the
chief decision . They are without competition. The same criteria that
we had in regard to employment will be in demand and restructuring,
"said Emil Boc.
Fig.1 The number of public sector performance by Romania during the crisis.
2. Private Sector: Approximately 150,000 people have been fired from the
private sector referred to the reasons:
o enough money to pay salaries
o business Bankruptcy
During the global economic crisis, unemployment in the euro area has expanded
from 7.2% in March 2008 to 10.1% in March 2010. Exceed the average level of the
Organization for Economic Cooperation and Development, where the unemployment
rate reached 8.7% in March 2010. The historical record in absolute terms, the 15.8
million unemployed in the euro area in May 2010 came after a fall of 6,000 in April,
according to Eurostat. Next month, however, brought an extra 35,000 unemployed.
The resumption of slow economic growth in the last months seems to be insufficient
yet to determine an increased volume of employees in the euro zone. According to a
theory of labor market specialists, to resume only after a minimum of 2% GDP
growth starting to create new jobs. Ronald Jansen, an economist at the European
Trade Union Confederation, even raises the threshold at 2.5-3%. Or, after the deep
recession in the euro area, an increase of less than 1.5% of GDP, as at present, it helps
to restore labor market. At the beginning of economic recovery, employers develop
their production without hiring new workers, only increasing the working hours of
existing employees.
Fig.2 the unemployed during the crisis of the Romanian active population, retirees
and employees.
Economic crisis on unemployment At the international level, according to press estimates given by Juan Somavia
(Director General of the International Labour Office), Hoteles number of unemployed
could rise from 190 million in 2007 to approximately 210 million at the end of 2009.
In Romania, union officials estimate that unemployment will exceed 8% in 2009 and
the number of unemployed will move 1.2 million people, given that nearly 500,000
romanians will return to Spain and Italy and in the context of doubling number of
unemployed in Romania. Until now, our country has suffered greatly from economic
recession. However, some companies have begun to lay off its staff in order to
prevent any possible losses. The number of unemployed in the private sector rose to
150,000, the most affected areas as textile industries, chemical, mechanical and of
furniture. The counties hardest hit by the economic crisis are those in northern
Moldova, in particular Botosani and Suceava. One of the most powerful companies in
Romania, Dacia Pitesti, announced that company for 17 days will come "in a forced
vacation," the roughly 11,000 employees were temporarily laid off. Rest period
coincides with winter holidays and therefore it is possible that until 1 January next
year factory activity is restarted. The measure was imposed in circumstances where
car sales have dropped dramatically, and production stock could further jeopardize the
economic situation of the company. People who stay home will receive 85% of salary.
0
200
400
600
800
1000
1200
2005 2006 2007 2008 2009
active population retired empoyees unemployed
In this way the company management to ensure that when the plant is restarted,
employees will return to work. Dacia technical unemployment effects chain, other
companies that supply the companies being forced to cease activity.Also and Nokia
Romania leadership decided to halt production at the village Jucu between December
22, 2008 to January 5, 2009. Nokia has decided to lay the passage of at least 100
people employed on a fixed period of three months, two subcontractors firms.
Silvania factories and RomSteel Cord Zalau, owned by Michelin, will stop operating
in or around 12 December and will resume work in January, and the outside public
holidays, the approximately 1,600 workers of the two units is temporarily laid off.
The decision to extend the winter holidays for factories and RomSteel Silvania Cord
Michelin Romania was taken because of the global economic crisis, the company
being forced to adjust production. Integrated Chemical fertilizers Azomureş from
Tirgu Mures to temporarily laid off about 2,000 employees. However, ArcelorMittal
has used other methods to resolve the crisis, namely the layoffs on request. So, about
1,500 contract employees have decided to stop working.
As every crisis is a definite opportunity, economic crisis favors reforms in the
euro area, boosting unemployment and subsequent revival of the market opportunity
by providing labor for the benefit of European competitiveness.
More labor market reforms will be beneficial, and their direction does not seem to be
hard to decipher. Typically, when inflation exceeds wage increases, salary
adjustments are made automatically. When inflation is rising more slowly than wages,
the adjustment is omitted, and thus the long term, productivity is losing ground. More
rigor and accountability will restore the competitiveness of the euro area.
Reforms differ from country to country, and how different labor markets. Those
workers who held jobs even during the crisis, the price of lower wages as occurred in
Britain (a phenomenon known by economists as "labor hoarding" in English "labor
hoarding"), will react more slowly restore growth.
If it knows how to reform the euro area will emerge from the crisis more productive,
with sound lean and efficient operation, after it crossed the period of record
unemployment.
Conclusions Romanian economy will know the phenomenon of structural unemployment -
people who want to work, but have minimum qualification required for available jobs.
As a corollary of the previous conclusion, we have unemployment and lack of labor
force - the current methodology for calculating the unemployment rate simply does
not contemplate this. To reduce the distance between the two Romanians (urban and
rural) have found a means for national training program.
The problems of economic restructuring, an important place occupies the industrial
sector. The main reasons why the problem occurs in this sector are chronic lack of
efficiency, capacity dimensioning and the government's intention to retain employees.
From my point of view, unemployment is inevitable, aggravated by economic
problems of the modern world, which probably will never disappear. However,
unemployment is a negative phenomenon, whose costs far outweigh its benefits.
References:
[1] Dan Popa, HotNews.ro Marţi, 9 noiembrie 2010, „ Restructurarile din BNR
continua. O parte din angajati trec in privat ca urmare a scaderilor salariale, altii vor fi
disponibilizati iar altii vor fi mutati in alte directii din banca―, [Online],
http://economie.hotnews.ro/stiri-finante_banci-8020317-restructurarile-din-bnr-
continua-parte-din-angajati-trec-privat-urmare-scaderilor-salariale-altii-vor-
disponibilizati-iar-parte-mutata-alte-directii-din-banca.htm
[2] Ioana Ene, ziare.com, 15 ianuarie 2010, „100.000 de bugetari someri - capcanele
unei restructurari necesare ‖, [Online, http://www.ziare.com/politica/guvern/100-
000-de-bugetari-someri-capcanele-unei-restructurari-necesare-987397
[3] Ioana Ene, ziare.com, 18 noiembrie 2010, „Cresterea salariilor bugetarilor, cu sau
fara efect asupra economiei‖, [Online],
http://www.ziare.com/articole/restructurare+bugetari
[4] Ioana Ene, ziare.com, 15 iuli 2009, ―Restructurari la Guvern: Personalul din
cabinetele demnitarilor, redus cu 20%‖, [Online], http://www.ziare.com/emil-
boc/guvern/restructurari-la- guvern-personalul-din-cabinetele-demnitarilor-redus-
cu-20-la-suta-820881
[5] Ion Andrei, evenimentul.ro, 17 iunie 2010, ‖ Guvernul începe restructurarea.
Oamenii de afaceri: 200.000 de birocraţi sunt în plus‖, [Online] ,
http://www.zf.ro/eveniment/guvernul-incepe-restructurarea-oamenii-de-afaceri-200-
000-de-birocrati-sunt-in-plus-6428682
[6] http://www.ziaruldevrancea.ro/index.php?articol=49291
[7] Ioana Ene, ziare.com, 14 octombrie 2010, ‖ Protest la Ministerul Educatiei: Zeci
de profesori cer demisia lui Funeriu (Video)‖ , [Online] ,
http://www.ziare.com/articole/restructurari+invatamant
[8] Ana Batca, capital.ro, 09 iulie 2010, „De ce scade şomajul în România a treia
lună la rând‖, [Online], http://www.capital.ro/detalii-articole/stiri/de-ce-scade-
somajul-in-romania-a-treia-luna-la-rand-136864.html
